Credit Score Factors and Risk Codes

There are credit scoring components that measure positive and negative creditworthiness traits. The negative traits are identified through this list of risk scoring reasons. They explain how certain damaging consumer behaviors are reported to the credit bureaus, and are identified by the code associated to them by each major consumer credit bureau.

Equifax TransUnion Experian Credit Bureau Risk Scoring Reasons
1 1 1 Amount Owed on Accounts is Too High: High balances are a precursor to financial meltdown.
2 2 2 Delinquency on Accounts: The level of delinquency can cause big swings in credit scores.
3 N/A 3 Too Few Bank Revolving Accounts: Major credit cards are huge indicators of creditworthiness.
4 N/A 4 Too Many Bank or National Revolving Accounts: Having eighteen major credit cards can be difficult to manage.
5 5 5 Too Many Accounts with Balances: Each additional balance carries an extra default risk.
6 6 6 Too Many Consumer Finance Company Accounts: Lenders outside of traditional lending options carry a stigma, high interest and elevated default patterns.
7 7 7 Account Payment History Too New to Rate: It takes more than just a couple of on-time payments on a new account to build a deep credit history.
8 8 8 Too Many Recent Inquiries in the Last 12 Months: Desperate attempts for new credit are an indication of financial crisis and rejection.
9 9 9 Too Many Accounts Recently Opened: A glut of new credit can be difficult to manage.
10 10 10 Proportion of Balances to Credit Limits is Too High on Revolving Accounts: A high credit utilization ratio can temporarily lower credit scores.
11 11 11 Amount Owed on Revolving Accounts is Too High: Excessive balances on credit cards can hurt no matter what your credit limits are.
12 12 12 Length of Revolving Credit History is Too Short: A rush to open new credit cards reduces your average revolving account age.
13 13 13 Time Since Delinquency is Too Recent or Unknown: It takes a while for the swelling to go down when you are late.
14 14 14 Length of Credit History is Too Short: No credit is still better than bad credit.
15 15 15 Lack of Recent Bank Revolving Information: A lack of major credit card account history reduces repayment predictability.
16 16 16 Lack of Recent Revolving Account Information: Failure to use any type of revolving accounts causes you to lose experience points.
17 17 17 No Recent Non-Mortgage Balance Information: A home loan is a great credit builder, but it doesn’t do it alone.
18 18 18 Number of Accounts with Delinquency: Multiple late fees and doubled minimum payments are the beginning of financial ruin.
19 27 19 Too Few Accounts Currently Paid as Agreed: Failure to maintain current payments on a majority of accounts carries additional penalties.
N/A 19 N/A Date of Last Inquiry Too Recent: An inquiry can lower your score up to 5 points for the first 12 months.
20 20 20 Length of Time Since Derogatory Public Record or Collection is Too Short: Consider this your cooling off period.
21 21 21 Amount Past Due on Accounts: Higher overdue balances are more difficult to recover from.
22 22 22 Serious Delinquency, Derogatory Public Record or Collection Filed: Major debt problems can limit new credit opportunities.
23 N/A 23 Number of Bank or National Revolving Accounts with Balances: Expect a penalty from high balances on major credit cards.
24 24 24 No Recent Revolving Balances: A lack of revolving activity can deny your credit profile of the ideal mix of credit accounts.
26 N/A 26 Number of Revolving Accounts: Too few revolving accounts make measurement of creditworthiness difficult, while too many can be difficult to manage.
28 28 28 Number of Established Accounts: Seasoned accounts are generally at least 2 years old and provide better long-term repayment predictability.
N/A 29 29 No Recent Bankcard Balances: Dormant credit cards are at risk of closure by lender due to inactivity.
30 30 30 Time Since Most Recent Account Opening is Too Short: Expect a temporary drop in scores immediately after opening a new credit account.
31 N/A 31 Too Few Accounts With Recent Payment Information: Your credit history from 2-7 years back is less relevant than more recent usage of credit.
32 4 32 Lack of Recent Installment Loan Information: Installment loans are important indicators in the credit mix component of scoring.
33 3 33 Proportion of Loan Balances to Loan Amounts is Too High: Installment loans provide a greater boost to scores once the balance is less than half the opening balance. Down payments are completely ignored.
34 31 34 Amount Owed on Delinquent Accounts: Credit scores drop as late payments mount.
38 38 38 Serious Delinquency and Public Record or Collection Filed: A defaulted credit account causes additional damage when collections and legal actions commence.
39 39 39 Serious Delinquency: Severely late payments can result in subsequent collections and legal action if not corrected.
40 40 40 Derogatory Public Record or Collection Filed: Deferrals of defaults to debt collectors and civil actions against you will reduce your credit scores.

These credit scoring factors make up FICO based risk models that are utilized by the main consumer credit reporting agencies (Equifax, Experian and TransUnion). Some factors are heavily weighted in credit scoring formulas while others yield little influence. Credit scoring formulas are secret, so much of the information here has been gathered from reputable sources including Fair Isaac Corporation.

Please note that a single action by a consumer could trigger multiple risk codes.These credit scoring risk reasons are what causes credit scores to fall from 850. They represent the negative factors that cause credit scores to drop. This is a more detailed list of credit scoring risk factors that are categorized within more broad credit scoring components.

This list of credit risk factors is provided as a public service of Debtors Unite, Inc., your debt help advocate.