Similar to a credit score, a credit rating splits your credit up into three types and measures your risk for revolving credit on a scale from one to nine:
I - Installment
Refers to a loan that has a fixed price and timeline that runs until the debt is paid. (Ex. Car loan).
O - Open
Open credit is when you borrow money up to a certain max limit and the full balance is due at the end of each period. (Ex. Student loans).
R - Revolving
The most common line of credit, this is when you make regular payments in varying amounts depending on the balance of your account, and can then borrow more money up to your credit limit. (Ex. Credit cards).
R0 - Too new to rate; approved but not used.
R1 - Pays within 30 days of payment due date or not over one payment past due.
R2 - Pays in more than 30 days from payment due date, but not more than 60 days.
R3 - Pays in more than 60 days from payment due date, but not more than 90 days.
R4 - Pays in more than 90 days from payment due date, but not more than 120 days
R5 - Account is at least 120 days overdue, but is not yet rated "9".
R6 - This rating does not exist.
R7 - Making regular payments through a special arrangement to settle a debt.
R8 - Repossession (voluntary or involuntary return of merchandise).
R9 - Bad debt; placed for collection; moved without giving a new address, or bankruptcy.
Managing Your Finances
Having a clear understanding of your credit report, rating, and score can help you better manage your finances and determine your ability to take on an auto loan. If you are in the market for a new or used car, truck or SUV, Canada Auto Finance is here to help. Fill out our simple online finance application and get the process started.