Metro 2 Account Type Code 03: Partially-Secured Loan

Specification

Code	03
Meaning	Partially-Secured Loan
Field	Account Type (Field 15)
Record	Base Segment
Length / position	2 chars · 84–85
Category	Secured and Collateralized Installment
CRRG reference	CRRG Exhibits 1 & 2 (Account Type Codes)

The distinguishing fact is coverage, not the existence of collateral. Collateral exists, but it is worth less than the loan.
Chosen at origination based on the loan-to-value relationship at that moment. It is not a code you switch to later because the collateral depreciated.
Does NOT mean the security interest is defective or unperfected. That is a legal question with no Metro 2 expression.
Does NOT mean two loans. A partially secured advance is one tradeline, not a secured tradeline plus an unsecured one.
Rare enough in consumer portfolios that many furnishers never use it, which is exactly why it is worth using correctly. A furnisher whose entire secured book reports as 02 is telling downstream lenders that every loan is fully covered, and on partially secured paper that is simply not true.

1A credit union advances $15,000 against a $6,000 share pledge and reports the whole loan as partially secured.
2A lender finances equipment plus soft costs where only the equipment carries a lien and the soft costs are effectively unsecured.
3A bank reports a consolidation loan collateralized by a deposit balance smaller than the amount consolidated.
4A lender takes a junior pledge on collateral already encumbered by a senior lien and reports the shortfall position honestly.
5A dealer-arranged loan finances the item plus taxes, fees, and an extended service contract, so the advance exceeds the collateral value on day one.

Decide 02 versus 03 at origination using the coverage relationship and then keep the code stable for the life of the account.
Do not use 03 as a hedge when you are unsure whether collateral exists. Confirm the file, then pick 01 or 02.
Leave Credit Limit zero-filled and report the full amount advanced in Highest Credit.
If the unsecured portion is later repaid so that the collateral fully covers the balance, do not switch to 02. The account type is set at origination.
Do not open a second tradeline for the unsecured portion. One advance is one obligation and one tradeline, even when the collateral covers only part of it.

A file can be structurally valid and still be wrong. These are the cross-field conditions Account Type Code 03 has to satisfy.

Portfolio Type must be I (Installment), which requires both a Scheduled Monthly Payment Amount and a numeric Terms Duration expressed in months.
Credit Limit must be zero-filled; Portfolio Type I does not carry a limit, and a populated limit is one of the most common portfolio-type validation rejects.
Highest Credit / Original Loan Amount reflects the full amount advanced, not just the secured portion. The format has no field for splitting the secured and unsecured halves, which is precisely why the account type carries that information.
Terms Frequency is normally M, consistent with any amortizing note. A frequency that does not match the payment schedule distorts the delinquency calculation the bureaus derive from Payment History Profile.
The K3 segment stays absent. This is not a real-estate account, and K3 pairs with Portfolio Type M.
If a third party pledged the partial collateral, that relationship belongs in the ECOA Code plus a J1 or J2 segment, not in Account Type.