Cracking the code

If you are denied credit, you will receive four reason codes which indicate why you were denied. These codes appear in order of importance, below. The first code has the strongest impact, followed in declining impact by the second, third and forth reason.

A typical readout your lender might view follows. This particular readout presents information from all three credit agencies. In the example below, the individual failed to qualify for each credit agency and the reasons are listed in descending order.

 

***** BORROWER: SMITH, JANE ***** TU Score: [00623] Reason1=[022]   Reason2=[016] Reason3=[028]   Reason4=[004] Experian Score: [00629] Reason1=[022]   Reason2=[016] Reason3=[028]   Reason4=[032] EQUIFAX: [00617] Reason1=[022] Reason2=[016] Reason3=[028] Reason4=[032]

All three credit agencies do not always have the exact same information therefore your three scores will differ slightly. As a general rule though, if you fail to qualify at one agency you are likely to still be denied if one of the other bureaus is checked. Most mortgage loans companies will run all three credit agencies and take the lowest score.

 

Reason	Experian	TU	Equifax
Amount owed on accounts is too high	1	1	1
Delinquency on Accounts	2	2	2
Too few bank revolving accounts	3	N/A	3
Too many bank or revolving accounts	4	N/A	4
Too many accounts with balances	5	5	5
Consumer finance accounts	6	6	6
Account payment history too new to rate	7	7	7
Too many recent inquiries last 12 months	8	8	8
Too many accounts opened in last 12 months	9	9	9
Proportion of balances to credit limit too high	10	10	10
Amount owed on revolving accounts is too high	11	11	11
Length of revolving credit history is too short	12	12	12
Time since delinquent is too recent or unknown	13	13	13
Length of credit history is too short	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
Too few accounts currently paid as agreed	19	27	19
Time since derogatory public record or collection	20	20	20
Amount past due on accounts	21	21	21
Serious delinquent, derogatory, public record or collection	22	22	22
Too many bank or revolving accts w/ balances	N/A	N/A	23
No recent revolving balances	24	24	24
Proportion of loan balance to loan amt. too high	33	3	33
Lack of recent installment loan information	32	4	32
Date of last inquiry too recent	N/A	19	N/A
Time since last account opening too short	30	30	30
Number of revolving accounts	26	N/A	26
Number of bank revolving or revolving accounts	N/A	26	N/A
Number of established accounts	28	28	28
No recent bankcard balances	N/A	29	N/A
Too few accounts with recent payment information	31	N/A	31

Note that these codes change often, and may not represent the current codes as of this writing.