Why are There Codes?

• A credit report contains a large amount of information. All of your financial accounts that have been reported for the previous seven plus years will appear. For each financial account the name of the creditor, balance, high balance, payment amount, type of account, payment history and more is recorded. By using codes, it reduces the amount of text needed.
  
  

I Codes

• The letter "I" refers to an installment loan.letter i image by Alexey Klementiev from Fotolia.com
  
  Any loan that is an installment loan will be marked by an "I." An installment loan is a loan with a fixed payment amount over a fixed number of years such as a mortgage or a car loan.
  
  

R Codes

• The letter "R" indicates a revolving account.Letter R in leopard fur image by Pete Linforth from Fotolia.com
  
  R codes are used to identify revolving credit. Revolving credit is a type of credit where you have a credit limit and can reduce the balance and charge it back up. A credit card is an example of revolving credit.
  
  

Number codes

• Along with the R or I code on the credit report you will find a 1 to 9. While it is rare to see a 5, 6, 7 or 8, the codes 1, 2, 3, 4 and 9 are commonly seen. A 1 indicates the payments are made on time. A 2 indicates a payment has been 30 days late. A 3 rating indicates the account has had a 60 day late payment and a 4 indicates the account has had a payment later than 90 days. A 9 -- the worst rating, shows the account has been charged off or referred to collections.
  
  

R1 Code

• By reading the above information, you can gather that an R1 is a revolving account that has been paid on time.