What Is a Remark Code on a Credit Report?

A credit report serves as a detailed record of an individual’s financial behavior, encompassing borrowing and repayment activities. This document is fundamental to personal finance, influencing access to loans, credit cards, and housing. Within a credit report, various pieces of information are cataloged, including “remark codes.” Understanding these codes is important for maintaining financial health.

Understanding Remark Codes

Remark codes are standardized notations used by credit bureaus and data furnishers, such as lenders, to provide additional context regarding entries on a credit report. They offer supplementary information beyond basic account statuses like “current” or “late.” These codes act as a concise shorthand, detailing the status or history of an account or event.

They typically appear adjacent to account entries, public records, or inquiries within your credit report. Remark codes clarify specific circumstances surrounding an account’s history or a consumer’s financial activity. While distinct from direct credit score calculations, they provide a deeper understanding for anyone reviewing the report. This contextual information aids in accurate interpretation of the data.

Common Remark Codes and Their Meanings

Consumers may encounter various remark codes on their credit reports, each conveying specific information. Some codes indicate positive or neutral account statuses. For example, “Account closed by consumer” or “Account closed by credit grantor” are common, indicating how an account’s status changed. “Account transferred to another lender” is another neutral code.

Other codes relate to payment history, such as “Pays or paid as agreed,” often represented by symbols like an asterisk () on Equifax reports. Codes indicating no data reported for a period, like “ND” on Experian or “NR” on Equifax, are also neutral, meaning information was not furnished for that time.

Conversely, many remark codes denote negative events that can impact a credit profile. Codes like “30 Days Past Due” or “60 Days Past Due” indicate late payments. More severe instances include “Collection” (C or COL) for accounts placed with a collection agency or “Charge Off” (CO or C/O), which signifies a debt deemed uncollectible.

Public record events also have associated remark codes, such as “Bankruptcy filed” (BKL, CBR, CBT), identifying formal insolvency proceedings. Other negative codes include “Repossession” (R, RPO) or “Foreclosure” (F, FC), indicating the seizure of collateral or real estate due to non-payment.

Codes like “Settled for less than full amount” or “Paying under a partial payment agreement” indicate a debt was not fully repaid as originally agreed. The meaning of these codes can vary slightly between the three major credit bureaus—Equifax, Experian, and TransUnion—but their general implications remain consistent.

Impact on Your Credit Profile

Remark codes provide context that influences how lenders and credit scoring models perceive a consumer’s financial responsibility. While the codes themselves do not directly factor into a credit score, the underlying events they describe directly affect creditworthiness. For instance, a remark code indicating a “charge-off” or “repossession” highlights a derogatory event. Such events are considered high risk by lenders, potentially leading to denial of new credit or less favorable terms, such as higher interest rates.

A neutral remark, like “account closed by consumer,” conveys a different message than a negative one, such as “settled for less than full amount.” The former suggests a consumer’s choice to manage accounts, while the latter indicates a failure to meet original debt obligations. Lenders use these distinctions to assess risk and make informed decisions. Negative remark codes can signal a history of financial difficulty, even if the account is now closed or paid.

Credit scoring models evaluate payment history, amounts owed, length of credit history, new credit, and credit mix. The events represented by remark codes, especially negative ones, are components of this data. Therefore, while a remark code itself isn’t a scoring factor, the adverse financial event it denotes will likely impact credit scores. This can affect a consumer’s ability to qualify for favorable interest rates on mortgages, auto loans, and other forms of credit.

Reviewing and Addressing Remark Codes

Regularly reviewing your credit reports helps identify any remark codes present. Consumers are entitled to one free credit report weekly from each of the three nationwide credit reporting agencies—Experian, Equifax, and TransUnion—through AnnualCreditReport.com.

Upon obtaining your reports, examine each account entry for associated remark codes, which typically appear next to the account details. If you identify an inaccurate or outdated remark code, the Fair Credit Reporting Act (FCRA) provides a process for disputing errors. Gather supporting documentation that proves the inaccuracy, such as payment records or legal documents.

Initiate a formal dispute directly with the credit bureau(s) reporting the error, either online, by mail, or by phone. Sending disputes by certified mail with a return receipt is recommended to create a paper trail. The credit bureau is generally required to investigate your dispute within 30 days. If the information is found to be inaccurate or cannot be verified, it must be updated or removed from your report.

For valid but negative remark codes, understand their long-term implications. Most negative information, including associated remark codes, remains on your credit report for approximately seven years, with bankruptcies staying for up to ten years. While these items cannot be removed if accurate, focusing on positive credit habits, such as consistent on-time payments and responsible credit utilization, can help mitigate their impact over time.