Credit denial is swift and unforgiving if you show a recent history of late payments. Your credit report might include the error code “too few accounts currently paid as agreed” if you are not current on a number of accounts.
| “Too Few Accounts Currently Paid as Agreed” | Credit Score Risk Factor Codes |
| Equifax | 19 |
| Experian | 19 |
| TransUnion | 27 |
| NextGen | R0 |
This may not necessarily show up if one of your 12 accounts is 30 days late, especially if you have other negative codes that are more important (such as serious past delinquencies). However, you can count on this code becoming a factor in credit denials if you are currently late on 10 of the 12 accounts.
Prospective lenders know that delinquency is a major contributor to default. The fewer accounts that you have that are current, the less likely that you will be approved for a new credit account. This means that it is highly unlikely that a lender will approve a debt consolidation loan to be used for catching up on or paying off other debt accounts.
How Can you Fix it?
You need to show that you can maintain credit accounts in good standing. This means adhering to all repayment terms as dictated by your loan or cardholder agreement.
Even if you are late on some accounts, you need to keep your other accounts current whenever possible. Many debtors mistakenly stop paying their current accounts to catch up their old accounts. This causes all of their accounts to revert to negative status due to the history of late payments, which can further lower their credit scores.
If your credit suffers permanent (lasting 7 years) damage from late payments, you can at least get many of your points back by restoring your accounts to current status. This can be done in a couple of ways.
The best way is to pay the full minimum payment due. By catching up on all of the arrears, you bring the account back to current status and avoid any further penalties such as late or over-the-limit fees. Your credit scores will improve once you have restored your accounts to current status.
When money is tight, you might need help getting back on track. Many debtors find that they simply cannot get caught back up once they fall behind on accounts. This may be due to having limited income or living paycheck-to-paycheck. One financial emergency is all it takes to push you behind on payments if you have no emergency savings in place.
There is an option to re-age certain credit accounts as a benefit of working with a credit counseling organization. Debtors that enroll in a debt management program often find that many of their major creditors will restore current status and waive late fees without requiring that they catch up on delinquent payments.
This benefit can be especially helpful to a family living on the edge. Imagine having $500 a month in minimum payments before falling behind. You might face minimum payments of $1,000 or more just to get caught back up. Compare that will a debt management program, where lower monthly minimum payments of around $400 might be possible. It is easy to understand the appeal of such programs, since they can help you get back to where your accounts are being reported as current.
Leaving your head in the sand will not work, as your accounts will continue to report as delinquent, or even worse, as charge-off bad debts. If you cannot bring your accounts current, it is important to get help before it is too late.
Too few accounts currently paid as agreed is credit bureau risk score reason 19 for Equifax and Experian credit scoring products (Reason 27 for Trans Union Empirica score). It is code R0 on NextGen scoring products. For more information on credit scoring, see the complete list of credit score factors.
Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.
Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.
In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.
Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!
Favorite quote:
"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Thomas Jefferson
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