diff --git a/src/plugins/trackCodeFlow/varTracking.ts b/src/plugins/trackCodeFlow/varTracking.ts
index cdc4227..3ba2ec8 100644
--- a/src/plugins/trackCodeFlow/varTracking.ts
+++ b/src/plugins/trackCodeFlow/varTracking.ts
@@ -1,4 +1,4 @@
-import { BscFile, FunctionExpression, BsDiagnostic, Range, isForStatement, isForEachStatement, isIfStatement, isAssignmentStatement, Expression, isVariableExpression, isBinaryExpression, TokenKind, Scope, CallableContainerMap, DiagnosticSeverity, isLiteralInvalid } from 'brighterscript';
+import { BscFile, FunctionExpression, BsDiagnostic, Range, isForStatement, isForEachStatement, isIfStatement, isAssignmentStatement, Expression, isVariableExpression, isBinaryExpression, TokenKind, Scope, CallableContainerMap, DiagnosticSeverity, isLiteralInvalid, isWhileStatement } from 'brighterscript';
 import { LintState, StatementInfo, NarrowingInfo, VarInfo } from '.';
 import { BsLintRules } from '../..';
 
@@ -209,6 +209,7 @@ export function createVarLinter(
             parent.locals = locals;
         } else {
             const isParentIf = isIfStatement(parent.stat);
+            const isLoop = isForStatement(closed.stat) || isForEachStatement(closed.stat) || isWhileStatement(closed.stat);
             locals.forEach((local, name) => {
                 const parentLocal = parent.locals.get(name);
                 // if var is an iterator var, flag as partial
@@ -227,6 +228,13 @@ export function createVarLinter(
                 if (parentLocal?.isIterator) {
                     local.isIterator = parentLocal.isIterator;
                 }
+                if (!local.isUsed && isLoop) {
+                    // avoid false positive if a local set in a loop isn't used
+                    const someParentLocal = findLocal(local.name);
+                    if (someParentLocal?.isUsed) {
+                        local.isUsed = true;
+                    }
+                }
                 parent.locals.set(name, local);
             });
         }
diff --git a/test/project1/source/unused-variable.brs b/test/project1/source/unused-variable.brs
index 910cb9c..3c8fe66 100644
--- a/test/project1/source/unused-variable.brs
+++ b/test/project1/source/unused-variable.brs
@@ -29,3 +29,22 @@ sub ok3()
         print a
     end if
 end sub
+
+sub ok4()
+    a = false
+    b = false
+    list = ["A", "B"]
+    for i = 0 to list.count() - 1
+        if list[i] = "A"
+            a = true
+            if b
+                exit for
+            end if
+        else if list[i] = "B"
+            b = true 'assume used because `b` could have been used in another branch of the loop
+            if a
+                exit for
+            end if
+        end if
+    end for
+end sub