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Understanding Adverse Action FICO Reason Codes

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If you get turned down for credit or don’t qualify for the best interest rate offered, you’ll want to understand what those two-digit FICO reason codes stand for in the letter you receive.

Credit Denial Questions

Here at Auto Credit Express, we’ve been part of the bad credit auto loan business for two decades. Because of this, every month we typically receive more than two hundred questions from consumers. In a few instances, these car buyers want to know why they got turned down for a car loan from a bank, captive lender, or subprime lender.

While we can’t answer this question, by law, lenders must inform borrowers, in writing, of what FICO calls “The key factors or reason codes that adversely affected the credit score, with a requirement to disclose five ‘reason codes’ any time inquiries are a ‘key factor’ that adversely affected the score.”

In other words, the lender has to tell you why you were turned down for credit. The lender also has to tell you where it obtained the information (which credit bureau), and where you can get that bureau’s credit report at no charge.

FICO Reason Codes

To help you understand, FICO created these “reason codes” that explain why you were either turned down or, if you were approved, why you failed to qualify for the best interest rates offered by a particular lender. The three major credit reporting agencies use this system, although they sometimes assign different “code numbers” to the reasons. In addition, not every bureau uses every reason code.

With that in mind, we put together a fairly complete list of reasons. Next to each reason we’ve listed three code numbers. The code number used by Equifax is listed first, TransUnion second and Experian third. If a bureau doesn’t use that particular reason, an “N/A” is shown in that bureau’s spot:

  • Amount owed on accounts is too high: 1, 1, and 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 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
  • Payments due on accounts: N/A, N/A, 46
  • Length of time consumer finance company loans have been established: N/A, 98, N/A
  • Lack of recent auto finance loan information: 98, N/A, N/A
  • Lack of recent auto loan information: N/A, 97, 98
  • Lack of recent consumer finance company account information: 99, 99, 99

Checking this list against a risk-based pricing notice, you should be able to figure out why you were either turned down or failed to qualify for the lowest interest rate offered.

How We Can Help You

If the credit denial you received was for a conventional auto loan, we want you to know that this is not the end of the road for most applicants. In fact, a BHPH car loan may not even be the only option you have.

Auto Credit Express has a nationwide network of car dealerships that are trained in special finance. This means they have the lenders and know-how to help people in all types of credit situations.

Our service is free, fast, and there’s no obligation to buy anything. See what we can do for you by filling out our car loan request form today.

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