Here are several different types of debt. They are:
Installment Debt - Installment debt is money owed to a creditor who expects repayment over a fixed period of time made in equal monthly amounts. A mortgage or a car loan is an example of installment debt. You are making the same payment over a fixed schedule of time. An auto loan, for example, might call for 48 equal payments of $300. A home loan might call for the same payment of $1000 every month for 30 years. You are paying these loans off in installments.
On your credit report it is easy to tell if an account is being reported as an installment account. The numeric Current Status rating will be prefaced by an "I." The "I" stands for installment.
Revolving Debt - Revolving debt is money owed to a creditor who sets your monthly payment based on the current balance. Credit cards or retail store cards are examples of revolving credit. Each month your balance varies based on your shopping activity from the previous month and any unpaid amount rolled over or "revolved."
As with installment debt, revolving debt is easily identified on your credit report. An "R" prefaces the numeric Current Status rating. The "R" stands for revolving.
Open Debt - Open debt is the least common type of debt to be found on your credit report. "Open" means that each month you run up a balance and pay it in full when you get your bill. Your cell phone is a good example of open debt. The American Express Green Card is another example of open debt. You don't have a predefined credit limit and you have to pay the balance in full each month.
