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.
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.
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.
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:
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.
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.
Senior Auto Financing Writer
Steve is an in-house expert with years of experience writing about car loans and financing with bad credit. Steve also brings his unique expertise as a contributing writer of car reviews and other content on our sister websites CarsDirect and LotPro.
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