Understanding R1 & I1 Credit Report Codes: What They Mean

The credit reporting industry sometimes uses what seem like "secret codes" on your report for the status of an account. R1 and I1 are the most critical codes to build your credit score, and you should aim to have an many of these as possible. Although these mean you are a good borrower, do not let them lull you into a false sense of security, however.

Identification

The "1" in a status code indicates that the account holder has never missed a payment and the alpha character abbreviates the type of debt. "R" stands for a revolving account, such as credit card or home equity line, and "I" is for installment loan, such as an auto or student loan.

Importance

Having revolving or installment accounts with anything other than a R1 or I1 usually hurts your credit score or at least does not improve it. Payment history accounts for 35 percent of your FICO score calculation. When lenders pull your report, they want to see several accounts in R1 or I1 status. An auto lender, for example, may hesitate to offer financing if you have I8 or a repossession on your report.

Considerations

Do not assume that having R1 and I1 accounts means you should not focus on improving your score or that you already have the best one. If you ever miss just one payment, the status on the account goes to R2 or I2. Also, in 2010, the best rates go to people who have a score above 760, according to Bankrate.com. Having a single R1 and I1 account may not be enough to get into the highest tier of scores.

Tip

The credit agencies do not always use status codes for their reports. Instead of "R1" or "I1" you might see a qualitative description, such as "paid as agreed" or "never late," according to Pat Curry of Bankrate.com. Also, compare reports from Equifax, Experian and TransUnion. They do not always have the same information on their reports or may contain errors.