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By: Ikedi Ani-okoye
Canada and the United States share many things in common. However, there are some serious differences in how credit scoring is carried out in the two neighbouring countries. Although credit scores are three digits in both Canada and the United States and range from 300 to 900, Canada has a system of credit ratings.
Canada's Office of Consumer Affairs (CCOA) lists these credit ratings as follows:
R0 Too new to rate; approved but not used;
R1 Pays (or paid) within 30 days of payment due date or not over one payment past due
R2 Pays (or paid) in more than 30 days from defrayment due date, but not more than 60 days, or not more than two payments past due
R3 Pays (or paid) in more than 60 days from defrayment due date, but not more than 90 days, or not more than three payments past due
R4 Pays (or paid) in more than 90 days from defrayment due date, but not more than 20 days, or four payments past due Pays (or paid) in more than 90 days from defrayment due date, but not more than 120 days, or four payments past due
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 agreement to settle your debts
R8 Repossession (voluntary or involuntary return of merchandise)
R9 Bad debt; laid for collection; moved without giving a new address or bankruptcy. Other rating indicators that might be found on a report are "I" for instalment credit or "O" for open credit line.
Consequently, in Canada, one might receive a three digit Canadian credit score as well as a two digit credit rating. If one is going to do business in Canada, one needs to be aware of these vital differences.
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