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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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21 Responses to “FICO Risk Factor Reason Codes”

  1. ian says:

    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?

  2. eric says:

    @ian

    Random index numbers.

    @jim

    May I know where you got this info from? Just curious. :)

  3. Jean says:

    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.

  4. Dave says:

    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?

  5. Damon Day says:

    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.

  6. nick says:

    @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.

  7. Mike says:

    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?

    • nick says:

      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.

  8. ellen in VT says:

    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).

    • Jim says:

      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).

  9. Jean says:

    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.

  10. Cathy says:

    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?

  11. LD says:

    thanks a lot for the info. that will came in handy for me.

  12. beth says:

    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**

    • Jim says:

      #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.

  13. CL Jones says:

    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.

  14. CL Jones says:

    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?

  15. jojo says:

    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?


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