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FICO Risk Factor Reason Codes
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When you apply for a loan or a credit card, the lender will run a credit report check on you to determine your credit worthiness. If they decide that you’re too great a risk for a loan or credit card, they’ll send you a letter in the mail letting you know that you’ve been rejected.
On the letter, they’ll list the bureau they pulled your credit report from (Equifax, TransUnion or Experian) as well as the risk factor reason codes for the risks you pose. The risk codes will be listed in the order of importance, so the higher up on the list in your letter, the more significant it is.
Ever curious what all the reason codes are? I was… so I did some digging. Here’s a list of all the reason codes as well as the number for each bureau.
EQ stands for Equifax, TU stands for TransUnion, and EX stands for Experian.
| Risk Reasons | EQ | TU | EX |
| Amount owed on accounts is too high | 1 | 1 | 1 |
| Level of delinquency on accounts | 2 | 2 | 2 |
| Too few bank revolving accounts | 3 | N/A | 3 |
| Too many bank or national revolving accounts | 4 | N/A | 4 |
| Too many accounts with balances | 5 | 5 | 5 |
| Too many consumer finance company accounts | 6 | 6 | 6 |
| Account payment history is too new to rate | 7 | 7 | 7 |
| Too many recent inquiries last 12 months | 8 | 8 | 8 |
| Too many accounts recently opened | 9 | 9 | 9 |
| Proportion of balances to credit limits is too high on bank revolving or other revolving accounts |
10 | 10 | 10 |
| Amount owed on revolving accounts is too high | 11 | 11 | 11 |
| Length of time revolving accounts have been established | 12 | 12 | 12 |
| Time since delinquency is too recent or unknown | 13 | 13 | 13 |
| Length of time accounts have been established | 14 | 14 | 14 |
| Lack of recent bank revolving information | 15 | 15 | 15 |
| Lack of recent revolving account information | 16 | 16 | 16 |
| No recent non-mortgage balance information | 17 | 17 | 17 |
| Number of accounts with delinquency | 18 | 18 | 18 |
| Date of last inquiry too recent | N/A | 19 | N/A |
| Too few accounts currently paid as agreed | 19 | 27 | 19 |
| Length of time since derogatory public record or collection is too short |
20 | 20 | 20 |
| Amount past due on accounts | 21 | 21 | 21 |
| Serious delinquency, derogatory public record or collection filed | 22 | 22 | 22 |
| Number of bank or national revolving accounts with balances | 23 | N/A | 23 |
| No recent revolving balances | 24 | 24 | 24 |
| Number of revolving accounts | 26 | N/A | 26 |
| Number of established accounts | 28 | 28 | 28 |
| No recent bankcard balances | N/A | 29 | 29 |
| Time since most recent account opening too short | 30 | 30 | 30 |
| Too few accounts with recent payment information | 31 | N/A | 31 |
| Lack of recent installment loan information | 32 | 4 | 32 |
| Proportion of loan balances to loan amounts is too high | 33 | 3 | 33 |
| Amount owed on delinquent accounts | 34 | 31 | 34 |
| Serious delinquency and public record or collection filed | 38 | 38 | 38 |
| Serious delinquency | 39 | 39 | 39 |
| Derogatory public record or collection filed | 40 | 40 | 40 |
How can you use this? These all reasons why the credit card company or the lender shouldn’t give you a loan or card, so avoid these. For example, reason code 1 for all three bureaus is “Amount owed on accounts is too high,” so you should avoid carrying too high a balance because that’s a bad thing (which is obvious even without the reason codes). Just imagine you have a friend who wants to borrow money and you’ve just put yourself in a lender’s shoes.
{ 21 comments, please add your thoughts now! }
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Can you give a little more information on ‘The risk codes will be listed in the order of importance’. The important ones will be listed on top I took to mean that they are listed in ascending order. This would mean that the most serious offense is ‘Amount owed on accounts is too high’. However, the last two on the list seem worse… ‘Serious delinquency’ and ‘Derogatory public record or collection filed’.
Does the numeric code directly relate to the order we would see them on a report or are these just random index numbers and not related to seriousness?
@ian
Random index numbers.
@jim
May I know where you got this info from? Just curious.
After this article and checked my report, Equifax has my home equity loan listed under revolving accounts instead of mortgage section.
It had an old payed off one with a zero balance in the mortgage equity section. I sent for a correction because I’m pretty sure with the equity loan under revolving accts lowers a FICO score. Can anyone confirm this? Thanks.
I came across your website and found it interesting. Wonder if you can talk about precious metals, especially silver and copper.
I try to buy a couple of ounces per month for the future. Your thoughts?
Thanks for that Jim,
I haven’t seen that all in one place before. I hope you don’t mind I copied it to a Word doc for reference for my clients.
@Jean
HELOCs are essentially revolving credit lines. So if you have a balance on them, you increase your credit line utilization…and possibly lower your FICO.
@ian
He meant the codes/description will be listed in a particular order on your credit report.
If you get denied credit, you shoule get a mail explaining why you were denied and the top one or two reasons will be mentioned in it as well.
Some in the list are obvious, but others like:
Number of revolving accounts
Number of established accounts
are not so obvious. Do these mean too many, too few? What is the optimum number of accounts?
i dont think there is an optimum number. i would think that it’s more of flag to see how thick your credit file is. for eg if the number of established accounts is 0 (or 1) then you are considered new to credit and would be ‘priced’ (apr,credit limit etc) accordingly.
I have a fico score of 790. But my car and home owner’s insurance company charges me extra because of my credit report. (They include a notice of adverse action with the bill.) The reason – I have too many credit cards (even though most aren’t used).
You should try to consolidate the cards if you have multiple cards from each issuer, that could reduce the number of credit cards you have but should not hurt your score (as long as you consolidate newer cards into older ones).
Thanks for responding, Equifax will not move my HELOC to mortgage spot instead of revolving credit. The part that bothers me it’s not descripitive that’s it’s for my home because I don’t have a mortgage on it. It looks like I have a credit line of 175,000. and no home to back it up.It must lower a FICO instead of a mortgage listed on the report. Anyone know? Thanks.
When i got into a jam with credit card debt and the amounts they wanted to catch them up went up daily, I entered payment programs with some of them to get set automatic payments and lower interest. As a result they closed the accounts. I have recently gotten a non secured personal loan and would like to consolidate most of my accounts. Does it help my score more to pay off the closed ones to reduce the number of accounts or pay down the open ones to increse my available credit?
i guess since you are in a payment program you better pay down those as promised.
thanks a lot for the info. that will came in handy for me.
I just applied for a credit card and got denied. These were the reasons i got denied.
1. derogatory public record or collection filed
2. lack of recent bank revolving information
3. length of time accounts have been established.
The reason for the collections is because someone wrote me a bad check and it went to collections. How long will that go away? What do 2-3 mean. Im new to credit cards. I thought that since I had loans out, my credit was good. confused**
#1 won’t go away for 7 years and it can’t be because someone wrote you a bad check, it has to be because you borrowed money and failed to pay it back. #2 means you don’t have any recent bank loans and #3 simply means you haven’t had a long history of credit.
So I have to wait 7 or so years to get a credit card? I do have a bank loan with my husband.
im trying to build my credit. any tips on how to do it?
Strangely society has allowed credit repositories and FICO to control their lives by placing them in a proverbial caste system.
Employers pay substandard wages and inflate prices that literally force potential negative acts among conumer purchase.
Example:
Home Purchase = $100K
Interest 6% (Compounded)
Mandatory Insurance Products (inflated in favor of merchant and disfavor consumer)
Auto Purchase price (Outrageous)
Auto Usuary interest paramounted to 21% or more driving up cost and hurting economic conditions with a flood of subprime lending products.
Education Loans are out of sight, with average student debt exceeding $35K
Health Insurance out of the park
Auto Insurance – Mandatory and inflated by greed by forcing credit scoring as a tool
Rental rates exceeding 60% of the average workers income – driven by greed.
What happen to the American economy where people believed in people and not computer generated scores that make a few rich and devestate the American economic system?
Force them out of business stop buying on credit, stop purchasing their products (i.e; reports, scores, protection…)they only produce these products to favor their benefit not the consumers.
It is time for America to take control of its own finances and drive greedy credit and predatory practices out of the game.
Also people remember the “Mark of the Beast” referred to in christian teachings? FICO, Experian, Equifax, Transunion and other affiliated groups are gathering more and more into this paradox by simply forcing them to continue support of the Scoring System which dictates how much and if a person can purchase in the USA and other countries.
“He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name.” Revelation 13:16-17
Consider,while you are not to know what does credit scoring imply if you allow it to continue?
I hope you can help explain my reason codes. Reason codes 2 through 4 makes no sense to me for my credit history. I understand #1 as it is due to a foreclosure of a rental property. Even with the foreclosure we have a credit score of 724.
#2. “The age of accounts in your credit file.” I have over 30 years of credit history and the oldest shown is an installment loan opened in 1994 and closed paid off in 2005. At least half are current revolving accounts.
#3. “There is insufficient information, or no account history, for mortgage accounts.” While we are currently mortgage free and own our home outright, we have mortgage history showing on our report as recently as 2009.
#4. “The length of time there has been account activity in your credit file.” We use credit cards daily.
Do the reporting companies always use four reason codes, even if they don’t really affect the score?