FICO score reason code · Code 40

“Derogatory public record or collection filed” — Decoded.

That line on your denial letter isn’t an insult — it’s a standard reason code, and it’s telling you exactly which lever moved against you. Here’s what it actually says about your file, in plain English.

The short answer

“Derogatory public record or collection filed” means: A collection account is on your report, or — far less commonly today, since civil judgments (2017) and tax liens (2018) were removed from Equifax/Experian/TransUnion files — a bankruptcy or other public record is. It does not mean: Paying the collection deletes it — on FICO 8 and older, which most card lenders still use, a paid collection scores the same as an unpaid one, so get the reporting reviewed before deciding how to handle it. The 800 Club’s team turns this reason into a plan on a free strategy call.

Reviewed by Christopher Blanco, Founder of The 800 Club · Reviewed August 2026

Lever: Derogatory Marks Service Case — record-level work — professional review territory

What It Does NOT Mean

It does not mean paying the collection deletes it — on FICO 8 and older, which most card lenders still use, a paid collection scores the same as an unpaid one, so get the reporting reviewed before deciding how to handle it. Newer models (FICO 9, FICO 10, VantageScore 3.0/4.0) ignore paid collections, and since 2022-2023 the bureaus no longer report paid medical collections, medical collections under 500 dollars, or medical collections less than a year old. You always have the free right to dispute inaccurate items directly with the credit bureaus — no company, including ours, can do anything on your file that you cannot do yourself.

“Derogatory public record or collection filed” — Decoded.

What It Actually Means

What It Does NOT Mean

The Lever It Points At: Derogatory Marks

The Same Reason, Other Wordings

Credit Repair, Handled

The Elite Credit Series

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