Every time your FICO score is calculated a set of codes is generated and delivered with the actual 3 digit number. These codes are the FICO Reason Codes (also known as Score Factors or Adverse Action codes).
These codes explain why a credit report didn’t receive the maximum score. You will normally see 4 of these reasons accompany a score.
The reason codes are two digits with a short definition for display purposes on credit reports. An example of a reason code is “too many accounts with balances” which is code ‘05’. An example of a score and reason codes is:
FICO Score: 500 38 21 18 05
(38) Serious delinquency and derogatory public record or collection filed
(21) Amount past due on accounts
(18) Number of accounts with delinquency
(05) Too many accounts with balances
The first number is the FICO score and the next four are the reason codes. In the example above, the score was 500 and the reasons for this score are (38) poor payment history with an account with late payments of 90 days late or worse and a public record or collection, (21) an amount that hasn’t been paid on time, (18) too many accounts with late payments and (05) too many accounts with amounts owed.
MYTH – These reason codes explain why the score is so low. That’s not true. A FICO score above 800 is also going to have these codes. Remember, they explain why the score wasn’t better, not why it was low.
These codes explain why a credit report didn’t receive the maximum score. You will normally see 4 of these reasons accompany a score.
The reason codes are two digits with a short definition for display purposes on credit reports. An example of a reason code is “too many accounts with balances” which is code ‘05’. An example of a score and reason codes is:
FICO Score: 500 38 21 18 05
(38) Serious delinquency and derogatory public record or collection filed
(21) Amount past due on accounts
(18) Number of accounts with delinquency
(05) Too many accounts with balances
The first number is the FICO score and the next four are the reason codes. In the example above, the score was 500 and the reasons for this score are (38) poor payment history with an account with late payments of 90 days late or worse and a public record or collection, (21) an amount that hasn’t been paid on time, (18) too many accounts with late payments and (05) too many accounts with amounts owed.
MYTH – These reason codes explain why the score is so low. That’s not true. A FICO score above 800 is also going to have these codes. Remember, they explain why the score wasn’t better, not why it was low.
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