FICO Score Factors Guide - TransUnion

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1 Factors Guide - TransUnion The consumer-friendly reason descriptions and things to keep in mind below are provided for use within FICO Open Access customer displays. The table includes a reason description and general educational to keep in mind for each of the reason codes associated with the FICO version your organization plans to disclose to its customers. This document is not intended to be provided to consumers, as it contains the actual reason code values. FICO 01 Amount owed on is too high 02 Level of delinquency on 03 Proportion of loan balances to loan amounts is too high 04 Lack of recent installment loan 05 Too many with balances 06 Too many consumer finance company 07 Account payment history is too new to rate FICO s consider how much a person owes on credit, such as credit cards and nonmortgage loans. Your score was impacted because amounts owed on on your credit report are too high. Missed and late payments, including the number of late payments, how late they were, and how recently they occurred, are important to FICO s. Your score was impacted by missed payments. FICO s weigh the balances of mortgage and non-mortgage installment loans (such as auto or student loans) against the original loan amounts shown on a person s credit report. Your score was impacted because your proportion of installment loan balances to the original loan amounts is too high. FICO s consider recent non-mortgage installment loans (such as auto or student loans) on a person s credit report. Your score was impacted because your credit report shows no recent non-mortgage installment loans or insufficient recent about your loans. FICO s consider the total number of a consumer holds with balances, including credit card balance amounts that appear from the most recent account statements even if that balance was paid off. Your score was impacted by having too many with balances. FICO s consider whether a person has any consumer finance company loans on their credit report. Your credit report shows one or more consumer finance company loans, which impacted your score. FICO s consider the extent of credit account payment on a person s credit report as a factor to determine if they are a responsible borrower. Your score was impacted because none of the credit on your credit report contain enough payment. In general, people who pay off their current debts and keep low balances appear less risky to However, keep in mind that consolidating or moving debt from one account to another will usually not help since the total amount owed remains the same. It s important to pay bills on time. Generally, people who remain current on payments appear less risky to In general, when a person first obtains an installment loan, the balance is high. A person with a loan balance that is high in relation to the original loan amount tends to be viewed as more risky to In general, people who purchase with an installment loan, and pay back the loan on time tend to demonstrate the ability to manage a variety of credit types. However, a new account opening, and to a lesser extent the credit inquiry associated with applying for a new account, may demonstrate higher risk in the short term. Generally, people who limit the number of they have with balances appear less risky to Consumer finance companies typically assume more risk by lending to people with less than perfect credit. The fact that a person has a consumer finance company loan on their credit report means that they generally represent a higher risk to lenders than someone with no consumer finance loans. People without enough payment or an established history for credit on their credit report tend to appear more risky to Copyright Fair Isaac Corporation. All rights reserved. 1

2 08 Too many inquiries last 12 months 09 Too many recently opened FICO s look at the number of times a person applies for credit, since people who are actively seeking credit tend to pose more of a risk to lenders than those who are not. Your FICO was impacted due to the number of applications for credit, or credit inquiries, within the last 12 months. FICO s consider the number of recent credit account openings. Your FICO was impacted because of too many recent credit account openings. Typically, the presence of inquiries on a credit report has only a small impact, carrying much less importance than late payments, the amount owed, and the length of time a person has used credit. FICO s consider recent inquiries less as time passes, provided no new inquiries are added. Opening several credit in a short time period is generally reflective of greater risk especially for people with a short credit history. 10 Proportion of balances to credit limits on bank/national revolving or other revolving is too high 11 Amount owed on revolving is too high 12 Length of time revolving have been established 13 Time since delinquency is too recent or unknown 14 Length of time have been established 15 Lack of recent bank/national revolving 16 Lack of recent revolving account As one of the most important score factors, FICO s evaluate account balances in relation to available credit on revolving. Your score was impacted because your proportion of balances to credit limits on these is too high. FICO s evaluate how much is owed on revolving, such as credit cards. Your score was impacted because of the amount you owe on these. FICO s consider the age of a person s oldest revolving account and/or the average age of revolving. Your score was impacted by the relatively low age of your oldest revolving account and/or the average age of your revolving. Missed and late payments, including the number of late payments, how late they were, and how recently they occurred, are important to FICO s. Your score was impacted because the time since your most recent past due payment was too recent. FICO s consider the age of a person s oldest account and/or the average age of. Your score was impacted by the relatively low age of your oldest account and/or the average age of your. FICO s evaluate a person s mix of credit cards, loans, and mortgages, and whether a person s credit report shows open credit cards or sufficient recent about credit cards. Your score was impacted by too little recent credit card on your credit report. FICO s evaluate a person s mix of credit products, and whether a person s credit report shows open revolving or sufficient recent about revolving. Your score was impacted by too little recent revolving on your credit report. People who pay revolving account balances, such as credit cards, as owed tend to show responsible credit behavior to However, keep in mind that consolidating or moving debt from one account to another will usually not help since the total amount owed remains the same. People with lower balances on revolving, generally, demonstrate lower risk to Also, keep in mind that consolidating or moving your debt from one account to another will usually not help since the total amount owed remains the same. In general, people who continually pay their bills on time, and demonstrate a good payment history tend to appear less risky to types of credit are generally less risky to However, keep in mind that opening a new card account, and to a lesser extent the credit inquiry associated with applying for a new card, may demonstrate higher risk in the short term. types of credit are generally less risky to However, keep in mind that opening new revolving account, and to a lesser extent the credit inquiry associated with applying for a new account, may demonstrate higher risk in the short term. Copyright Fair Isaac Corporation. All rights reserved. 2

3 17 No recent non-mortgage balance 18 Number of with delinquency 20 Time since derogatory public record or collection is too short 21 Amount past due on 24 No recent revolving balances 27 Too few currently paid as agreed 28 Number of established 29 No recent bank/national revolving balances 30 Time since most recent account opening is too short FICO s consider whether a person s credit report shows open or recently reported, other than a mortgage. Your score was impacted by the amount or recency of on these appearing on your credit report. Missed and late payments, including the number of late payments, how late they were, and how recently they occurred, are important to FICO s. Your score was impacted because your credit report shows one or more with missed payments. FICO s consider the recency of a derogatory public record (such as a bankruptcy or tax lien) or collection on a person s credit report as a powerful predictor of future payment risk. Your score was impacted by the length of time since a public record or collection activity. FICO s consider payments past due on. Your score was impacted by the amounts past due on. FICO s consider whether a person s credit report shows recent balances on revolving. Your FICO was impacted because you are not currently demonstrating active revolving credit management. FICO s consider the number of that are paid as agreed. Your score was impacted because the number of these is too low, or because you've missed payments recently on some of your. FICO s look at the total number of on a person s credit report. Your score was impacted because you have either a relatively high or low number of on your credit report. FICO s evaluate recent balances on the credit card shown on a person s credit report. Your FICO was impacted because you are not currently demonstrating active bank/national revolving credit management. FICO s consider how recently a person opened a new credit account as shown on their credit report. Your score was impacted because of the time since you opened a new account. types of credit are generally less risky to However, keep in mind that opening a new account, and to a lesser extent the credit inquiry associated with applying for one, may demonstrate higher risk in the short term. It s important to pay bills on time. Generally, people who remain current on payments appear less risky to Most public records and collections stay on a person s report for no more than seven years though bankruptcies may remain for up to 10 years. However, as this item ages, its impact will gradually decrease as time passes. People who stay caught up on amounts due and continue to pay their bills on time are generally viewed as less risky to Generally, the greater amount that is past due, the greater the risk to People who show moderate and conscientious use of revolving, such as having low balances and paying them on time, generally demonstrate responsible financial behavior. People without recent revolving credit activity tend to be viewed as higher risk by In general, people that have very few paid as agreed or have missed payments recently on some of their tend to appear more risky to People who responsibly maintain a moderate number of open rather than a relatively high or low number of tend to demonstrate lower risk to However, a new account opening, and to a lesser extent the credit inquiry associated with applying for a new account, may demonstrate higher risk in the short term. Keep this in mind: People who demonstrate moderate and conscientious use of revolving credit card, such as maintaining low balances and paying them on time, tend to demonstrate lower risk to People who recently opened a new credit account tend to be viewed as more risky to Copyright Fair Isaac Corporation. All rights reserved. 3

4 31 Amount owed on delinquent 36 Length of time open installment loans have been established 38 Serious delinquency, and public record or collection filed Late payments are generally a very powerful predictor of future payment risk, and FICO s consider the balances on past-due on a person s credit report. Your score was impacted by the relatively high amount you owe on past-due. FICO s consider the age of the oldest open (not yet paid off) installment loan and/or the average age of open installment loans on a person s credit report. Your score was impacted by the relatively low age of your oldest open installment loan and/or the relatively low average age of your open installment loans. FICO s consider the presence of both a public record or collection and a serious delinquency on a person s credit report as a powerful predictor of future payment risk. Your score was impacted because your credit report shows a public record or collection in addition to a delinquency. The higher the balances on past-due on a person s credit report, generally the greater the risk to Most collections, public records and delinquencies stay on a person s credit report for no more than seven years though bankruptcies may remain for up to 10 years. However, as an item ages, its impact will gradually decrease as time passes. 39 Serious delinquency FICO s consider the presence of a serious delinquency (very late payment) on a person s credit report as a powerful predictor of future payment risk. Your score was impacted because your credit report shows one or more serious delinquencies. People with previous late payments are much more likely to pay late in the future, and tend to be viewed as risky to Most late payments stay on a person s credit report for up to seven years. 40 Derogatory public record or collection filed 53 Amount paid down on open mortgage loans is too low FICO s consider the presence of a derogatory public record (such as a bankruptcy or tax lien) or collection on a person s credit report as a powerful predictor of future payment risk. Your score was impacted because your report shows one or more public record or collection activity. FICO s consider how much a person owes on their open mortgage loans relative to the original mortgage loan amounts. Your score was impacted because of the relatively high amount you owe on mortgages in relation to their original amounts. People with a public record or collection on their credit report tend to appear more risky to Most public records and collections stay on a person s credit report for no more than seven years though bankruptcies may remain for up to 10 years. A lower remaining balance on a mortgage generally demonstrates a lower risk to 55 Amount paid down on open installment loans is too low 58 Proportion of balances to loan amounts on mortgage loans is too high 59 Lack of recent revolving HELOC FICO s consider how much a person owes on their open installment loans, such as auto loans, relative to the original loan amount. Your score was impacted because of the relatively high amount owed on open installment loans in relation to their original loan amounts. FICO s evaluate the balances of mortgage loans in relation to the original mortgage loan amounts on a person s credit report. Your score was impacted because of relatively high mortgage loan balances in relation to original mortgage loan amounts. FICO s evaluate the mix of credit products on a person s credit report, including regarding revolving home equity lines of credit (HELOC). Your score was impacted because your credit report shows no open HELOCs, or insufficient recent about HELOCs. Generally, the less paid down on existing installment loans, the greater risk posed to In general, when a person first obtains a mortgage loan, the balance is high. A person with a mortgage loan balance that is high in relation to the original loan amount tends to be viewed as more risky to In general, people who demonstrate responsible use of different types of credit (such as HELOC ) appear less risky to However, keep in mind that a new account opening, and to a lesser extent the credit inquiry associated with applying for a new account, may demonstrate higher risk in the short term. Copyright Fair Isaac Corporation. All rights reserved. 4

5 62 Proportion of balances to credit limits on revolving HELOC is too high 64 Proportion of revolving HELOC balances to total revolving balances is too high 65 Length of time bank/national revolving have been established 67 Length of time open mortgage loans have been established 70 Amount owed on mortgage loans is too high 71 Too many recently opened installment 77 Proportion of balances to loan amounts on auto is too high 78 Length of time reported mortgage have been established 79 Lack of recent reported mortgage loan FICO s evaluate balances in relation to available credit on home equity lines of credit (HELOC) on a person s credit report. Your score was impacted because your balances on your HELOCs are relatively high in proportion to your HELOC credit limits. FICO s evaluate the balances of revolving home equity line of credit (HELOC) in relation to the total revolving balances on a person s credit report. Your score was impacted because this proportion is too high. FICO s consider the frequency of new credit card openings and the length of time credit cards have been open on a person s credit report. Your score was impacted by the relatively low age of your oldest credit card account and/or the relatively low average age of your credit card. FICO s consider the length of time since a mortgage account has been established, since newer mortgages tend to have the potential for greater risk. Your score was impacted by the relatively younger age of your oldest open mortgage loan and/or the relatively younger average age of your open mortgage loans. FICO s take into account how much a person owes on their mortgage loans. Your score was impacted because your credit report shows that the amount you owe on one or more mortgage loans is too high. FICO s evaluate the frequency and recency of new installment account openings shown on a person s credit report. Your score was impacted by having too many recently opened installment on your credit report. FICO s evaluate the balances in relation to the original loan amount on automobile loans on a person s credit report. Your score was impacted because you have relatively high auto loan account balances in relation to the original loan amounts. FICO s consider the frequency of new mortgage account openings and the length of time that have been open as shown on a person s credit report. Your score was impacted because the age of your oldest reported mortgage loan and/or the average age of your mortgage loans is relatively low. FICO s evaluate a person s mix of credit cards, loans, and mortgages, and recent on mortgage loans appearing on a person s credit report. Your score was impacted because your credit report shows no open mortgage loans, or insufficient recent about your mortgage loans. People with lower revolving HELOC balances tend to be viewed as less risky to However, keep in mind that consolidating or moving debt from one account to another will usually not help since the total amount owed remains the same. People with higher revolving HELOC balances in relation to all revolving balances tend to be viewed as more risky to However, keep in mind that consolidating or moving debt from one account to another will usually not help since the total amount owed remains the same. People who frequently open new and have shorter credit histories generally are considered higher risk to People who have longer mortgage account history generally pose less risk to Generally, the more a person owes on these, the greater the risk posed to However, keep in mind that consolidating or moving debt from a mortgage account to another account will not change the total amount owed. In general, people who open several installment loans in a short time period tend to demonstrate greater risk to lenders especially for people with relatively short credit histories. In general, people who carry lower automobile loan balances in relation to the original loan amount are considered less risky to In general, people who demonstrate responsible use of different types of credit are generally less risky to However, be aware that a new account opening, and to a lesser extent the credit inquiry associated with applying for a new mortgage loan, may demonstrate higher risk in the short term. Copyright Fair Isaac Corporation. All rights reserved. 5

6 81 Frequency of delinquency FICO s consider the frequency of missed and late payments including the number of late payments, how late they were, and how recently they occurred. Your score was impacted because your credit report shows too many delinquencies. People who continually pay their bills on time tend to appear less risky to 85 Too few active FICO s consider the number of which a person is actively using and paying as agreed as shown on their credit report. Your score was impacted by having very few, or not using your recently. People with very few or that have not used credit recently generally appear more risky to However, be aware that a new account opening, and to a lesser extent the credit inquiry associated with applying for a new account, may demonstrate higher risk in the short term. 96 Too many mortgage loans with balances 97 Lack of recent auto loan 98 Length of time consumer finance company loans have been established 99 Lack of recent consumer finance company account FICO s look at the total number of mortgage loans with outstanding balances on a person s credit report. Your score was impacted by having too many mortgage loans with balances. FICO s evaluate the mix of credit cards, loans, and mortgages on a person s credit report. Your score was impacted because your credit report does not show any open auto loans or sufficient recent about any of your auto loans. FICO s consider the age of a person s oldest consumer finance company loan and/or the average age of all of a person s consumer finance company loans. Your score was impacted by the relatively low age of your oldest consumer finance company loan and/or the average age these loans. FICO s consider whether a person has a consumer finance company loan on their credit report. Your score was impacted because your credit report does not show any recent consumer finance company account. People with a moderate number of mortgage loans with balances tend to represent lower risk than those with a relatively large number of mortgage loans with balances. types of credit are generally less risky to However, be aware that a new account opening, and to a lesser extent the credit inquiry associated with applying for a new account, may demonstrate higher risk in the short term. Consumer finance companies typically assume more risk by lending to people with less than perfect credit. People with no reported recent (such as payment ) about any consumer finance loans on their credit report tend to show lower risk to Copyright Fair Isaac Corporation. All rights reserved. 6