Getting your credit report from one of the three major credit bureaus — Experian, Equifax and TransUnion — is the easy part. Interpreting the report is another thing. Each bureau assigns codes to your credit accounts and loans, codes that indicate how an account was paid — on time, late or not at all. Some codes are different from one bureau to another but others, like the "I1" code, means the same across all three credit bureaus.
The credit bureaus use the letters I, R and O to define the type of loan. Installment loans — loans with a fixed number of payments — are coded with an I. Revolving accounts — open-ended such as credit card accounts — are designated with an R. An open account, with payments due within 30, 60 or 90 days, is an O account. The number following the letter indicates the time payments were made as compared to when they were due. An "I1" means you have an installment loan and you never had a late payment.
Codes like "I1" are reflected in your credit score. The Fair Isaac Corporation calculates a credit score between 300 and 850, with 850 being the best. These scores, called FICO scores, use information from your credit report to calculate your own personal score. While the specific formula used by FICO is not public information, generally payment history and amounts owed have the highest effect on your score.
Maintain I1 Status
An "I1" status on your credit reports says that you pay your bills on time and helps to keep your FICO score high. Don’t, however, get complacent about this. Some people use automatic bill payment for a loan that has the same amount due each month. This is a great way to keep your "I1" status unless there is a problem at the bank or with you account — check each month to confirm the payment was made on time. Continue to pay all your bills on time, well ahead of the due date to allow for processing time. It takes only one slip to see your FICO score drop.
Check Credit Report Regularly
By federal law, you are entitled to a free credit report once a year. Because the information is used when applying for credit, it is important to confirm that the information is current and accurate. One way to stay on top of things is by ordering your free credit report from one credit bureau, then four months later, order from another bureau. After another four months get a report from the third credit bureau. Finally, after another four months, you will come full circle and can order another report from the first bureau. This allows you to monitor your credit report over the entire year.
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