Factors affecting your credit score are explained by reason codes. By using these codes, you can improve your score.

If you have ever been denied credit, you have also received a letter – known. As a “Negative Action Notice” – explaining why the lender rejected you.

This notice may include lines such as: “16-Lack of recent revolving account. Information” or “02 levels of crime on accounts.” And you may have wondered what they mean.

There can be up to four “reason codes” or “negative action codes” if the lender used your credit score to reject your application. Some notices only list statements.

A lender may also decide not to approve your application based on factors such as your income or debt, which are difficult to control. But understanding the Codes for Credit Scores will help you understand your credit score and how to improve it.

Not all reason codes are the same.

The two largest credit scoring companies are FICO and VantageScore, and each has several versions of the credit score. You will receive different reason codes depending on the credit scoring company and the score version used by the lender.

If the lender used VantageScore for your application, you can enter the reason code received on VantageScore’s website www.ReasonCode.org. The site explains what the code means in plain language and what you can do to improve your credit score. (It also has a list of all the reason codes you may have received.)

FICO, commonly used by lenders, does not have the same resources.

NerdWallet Credit Bureau provides VantageScore from TransUnion, which is updated weekly, as well as provides insights to help you understand why your score has changed.

What does the code mean for your credit score?

Reason codes come in five large buckets, and each can give advice on how to make your score:

Criminal accounts or defamatory public records: Bills that are not paid 30 or more days after the due date are considered criminal. A criminal account may appear on your credit reports and damage your score. Contempt of public record is a right of bankruptcy, civil judgment, or tax. Bankruptcy may have ended, a decision may have been made, or the tax may have been paid, but if it happened recently, it will still affect your credit score. However, all of these negative signs fall from your report over time, restoring your score.

Tip: How long do the negative marks on my credit report last?

Lack of current loan/account information: Because of this language, codes can define “revolving” accounts to identify “installment” accounts for credit cards or other types of loans.

This code means that your accounts have not been activated recently or that you do not have an account of this type. Credit scores benefit from a mix of accounts – but you probably shouldn’t borrow to boost your score. The best way to build your score is to use the accounts you have responsibly and pay your bills on time and in full.

Tip: 3 Ways to Improve Your Credit by 100 Points

The amount owed to the accounts is too high: therefore the code indicates the level of your debt. If your credit card balance is high, or the amount paid on installment loans is very low, try to pay more towards your debts to help your score.

Advice: How to repay the loan.

Account Creation Period: Having new credit accounts or loans – or having a short credit history – can mean that your average. Account age is short, and it can lower your score. Ask a family member to add you to a long-established credit card account. As an authorized user can increase the average age of your accounts. If this is not possible, you may need to wait and reapply later.

Tip: 5 Ways to Establish Credit

Too many accounts or inquiries: This type of reason code is straightforward.  If you’ve opened too many accounts in too little time or applied for credit too many times, it will affect your credit score, and your New credit can be denied. While you wait to reapply, research credit card offers and study the factors. That go into your score and what the lender looks for in the application.

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