How to Read those Confusing Credit Score Codes

As part of virtually every credit report that we’ve seen, credit bureaus include a list of “reason codes” with numbers and a short (very short) explanation of what the number means. So if you’ve read a copy of your credit report in the last few years, you’ve probably seen them too.

Let us give you an example of what we mean. Let’s say that your credit report listed a “reason code” of “32.” The short explanation might say, “Balances on bankcard or revolving accounts too high compared to credit limits.”

So, you might be asking yourself — what the heck does that mean?

Well, we want to share with you a website that allows you to type in the “reason code number,” which will give you the details of what it really means and what they suggest you do to improve your credit score.

Let’s go back to the #32 Reason Code—Here are the long explanation comments:

Bankcard accounts include credit cards and charge cards from a bank and are frequently revolving accounts. Revolving accounts allow you to carry a balance and your monthly payment will vary, based on the amount of your balance. You have bankcards or revolving accounts in your credit file with balances that are high compared to the credit limit on the account, which is a proven indicator of increased risk.

Here’s a tip on what to do to increase your score:

Pay down balances on your accounts and keep them below 30% of the total credit limit on that account. Over time this will have a positive impact on your score.

The website is ReasonCode.org. You’ll find videos, FAQ’s and interactive links where you can type in the reason code and the explanations appear.

Please feel free to contact one of our Loan Officers if you’d like our help in interpreting the “reason codes” on your credit report. We may be able to advise you on what to do to increase your credit scores.