If you have ever been denied credit, chances are you have received a letter in the mail, stating the reasons for your credit denial. The letter may have included some codes on it, such as EQ1 or TU19 or even a EX4. Your lender will pull one or more credit reports to decide on how credit worthy you are. If for any reason they decide that you are too risky to extend credit to, you will receive a letter of denial, explaining why you have been denied credit. The letter will explain which credit reports were accessed, and what factors were used to deny you credit. This may include the risk factor reason codes for the risks you pose.
I did some research on these codes, and gained a lot of knowledge on what makes a person a credit risk. We will go over the codes, so you too can gain this knowledge, and avoid these habits. By knowing exactly what creditors are looking at on your credit report, and what mistakes to avoid, you will improve not only your credit score and credit report, you will also have less risk of being denied credit in the future. For ease of explaining these codes EQ stands for Equifax, TU stands for TransUnion, and EX stands for Experian. Not all credit reporting agencies all use the same codes, for example only TransUnion uses code 19.
Amount owed on accounts is too high: EQ1 TU1 EX1
Level of delinquency on accounts: EQ2 TU2 EX2
Too few bank revolving accounts: EQ3 TU N/A EX3
Too many bank or national revolving accounts: EQ4 TU N/A EX4
Too many accounts with balances: EQ5 TU5 EX5
Too many consumer finance company accounts: EQ6 TU6 EX6
Account payment history is too new to rate: EQ7 TU7 EX7
Too many recent inquiries last 12 months: EQ8 TU8 EX8
Too many accounts recently opened: EQ9 TU9 EX9
Proportion of balances to credit limits is too high on bank revolving or other revolving accounts: EQ10 TU10 EX10
Amount owed on revolving accounts is too high: EQ11 TU11 EX11
Length of time revolving accounts have been established: EQ12 TU12 EX12
Time since delinquency is too recent or unknown: EQ13 TU13 EX13
Length of time accounts have been established: EQ14 TU14 EX14
Lack of recent bank revolving information: EQ15 TU15 EX15
Lack of recent revolving account information: EQ16 TU16 EX16
No recent non-mortgage balance information: EQ17 TU17 EX17
Number of accounts with delinquency: EQ18 TU18 EX18
Date of last inquiry too recent: EQ N/A TU19 EX N/A
Too few accounts currently paid as agreed: EQ19 TU27 EX19
Length of time since derogatory public record or collection is too short: EQ20 TU20 EX20
Amount past due on accounts: EQ21 TU21 EX21
Serious delinquency, derogatory public record or collection filed: EQ22 TU22 EX22
Number of bank or national revolving accounts with balances: EQ23 TU N/A EX23
No recent revolving balances: EQ24 TU24 EX24
Number of revolving accounts: EQ26 TU N/A EX26
Number of established accounts: EQ28 TU28 EX28
No recent bankcard balances: EQ N/A TU29 EX29
Time since most recent account opening too short: EQ30 TU30 EX30
Too few accounts with recent payment information: EQ31 TU N/A EX31
Lack of recent installment loan information: EQ32 TU4 EX32
Proportion of loan balances to loan amounts is too high: EQ33 TU3 EX33
Amount owed on delinquent accounts: EQ34 TU31 EX34
Serious delinquency and public record or collection filed: EQ38 TU38 EX38
Serious delinquency: EQ39 TU39 EX39
Derogatory public record or collection filed: EQ40 TU40 EX40
Every single one of these is a reason you can be denied credit. Learn these codes, and review your credit report, and look for any of these factors on your credit report. If you have any of these negatives, do what you can to repair the damage, if possible. These negative behaviors are behaviors to avoid if you care about your credit score.
