Credit Score Coding Explained
Negative Entries on High Credit Scorers
Credit Scores of 760 and beyond frequently have notations of a negative nature. Yes, even the well off have problems. We have all read stories about lottery winners who have found misery with their winnings instead of the happiness they imagined such a windfall would bring. Needy relatives, alcoholism, gambling…you name it. Still we wouldn’t we all love to take the chance of seeing how a lottery win would affect our own life? For us it would be different we all think. Just give us a chance to prove it.
Winning the lottery is a poor retirement plan. Credit score coding explained will help you manage a realistic financial plan.
A Credit Score of 760 or Above Will Get You Anything
You could say that any need to raise your credit score above 760 is just a need to show off. Once you are at 760 you will get the best rates available for any loan. Of course you would like to have a higher score as a cushion against an unexpected set back. Higher scoring is not just for ego when you like to have an insurance policy for the unforeseen. Some high scorers get upset over the following notations on their credit reports:
- “No Recent Bankcard Information” This means your credit cards are inactive. But don’t pay just the minimum if you see this notation. Use the card enough to get regular monthly reporting with small purchases.
- “Too Many Bankcard Charge Accounts” Notice this doesn’t say too many “open” Bankcard Charge Accounts” Closing them will not help and may hurt by worsening the “available credit” component of your debt to available credit ratio.
- “Lack of Recent Installment Loan Information” Opening an installment loan account to counteract this may hurt more than help. If you do that you will be adding an inquiry on your report as well as increasing your debt to available credit ratio and lowering the average age of your accounts.
Credit Report Entries for Average to Low Credit Scorers.
For those with credit scores below 760 there is always room for improvement. Whether you have a high score that you are looking to improve or an average to below average credit score these are some of the common problems along with the various codes used by the credit scoring agencies. Knowing what the problem is does not help you understand exactly how much impact that problem has on your score. Some of this vagueness is apparently intentional to prevent reverse engineering by consumers to manipulate the system. Also many loans and credit cards only report to one credit reporting agency so expect some differences for that reason. There are some variations within the Big Three credit reporting agencies but the credit score coding explained list below should help you to be aware of the common notations:
Credit Score Coding Explained
001…Amount owed on accounts too high. 002…Level of delinquency on accounts too high. 003…Too few revolving accounts. 004…Too many revolving accounts.005…Too many accounts with balances. 006…Too many consumer finance accounts. 007…Account payment history too new to rate. 008…Too many recent account inquiries in last 12 months. 009…Too many accounts opened in last 12 months. 010…Proportion of balances to credit limits too high on new accounts. 011…Amount owed on revolving accounts too high. 012…Length of revolving credit history too short. 13…Time since delinquency is too recent or unknown. 14…Length of credit history is too short. 15…Lack of recent bank revolving credit information. 16…Lack of recent revolving account information. 17…No recent non-mortgage information. 18…Number of accounts with delinquency. 19…Too few accounts paid as agreed. 20…Time since derogotory public account or collection. 21…Amount past due on accounts. 22…Serious delinquent derogotory public record or collection. 23…Too many bank or national accounts with balances. 24…No recent revolving balances. 25…Proportion of loan balances.
You also Need to Know…
Credit scoring negative entries are listed in their order of importance. At or near the top are: Serious Delinquencies. Serious Delinquencies most commonly refers to accounts that are 60 days late or worse. This notation also can refer to accounts settled for less than the full amount such as short sales or debt settlements. The more recent the infraction the more it hurts your score.