Consumer Car Buying Advice Blog

Understanding those FICO reason codes that often lead to applying with subprime auto lenders

Helping you understand

In the past it was often difficult for auto loan applicants to understand why they were turned down for a car loan. But that’s all changed with recent adverse action notice requirements.

We know about all this because at Auto Credit Express for the past two decades we’ve been helping credit-challenged car buyers find dealers that can get them approved auto loans. Another thing that’s helping buyers with low FICO scores is a recent financial reforms package that was passed in Congress with new lender requirements.

Notice requirements and reason codes

Recent financial reforms require that lenders send all applicants a risk-based pricing notice that must include, as FICO puts it, “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.”

FICO has created 40 of these codes to explain why you were either turned down for a loan or failed to qualify for the best interest rates offered by a particular lender.

Since no credit reporting agency uses all of them, we put together the complete list of reasons. Next to each reason are 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 space.

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

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 on an auto loan.

Once you know

But if you have been turned down for a conventional car loan, we also want you to know that there’s a good chance you have the option of more than just a tote the note car dealer and one that can enhance your credit repair efforts.

That’s because Auto Credit Express specializes in matching applicants with poor auto credit to dealers that can offer them their best chance at getting approved auto loans.

So if you’re ready to begin reestablishing your car credit, you can start now by filling out our online auto loans application.

Tags: Credit Repair, FICO score

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