One of the greatest factors for demonstrating that you are a high credit risk is to be delinquent on several credit accounts. If your credit report reveals this code as a contributing factor for denial, then you should focus on catching up on late payments rather than opening new accounts.
| “Number of Accounts with Delinquency” | Credit Score Risk Factor Codes |
| Equifax | 18 |
| Experian | 18 |
| TransUnion | 18 |
| NextGen | M1 |
You might have good intentions, such as paying off your delinquent accounts with a single consolidation loan. However, no reputable lender will approve such a credit application when you are already in a world of trouble.
Your payment history carries a weight of 35% of credit scoring formulas. The number of accounts that you are late on is a major factor within this category.
To improve your credit score right away, you need to restore as many accounts as possible to current status. This can be done by paying the full minimum payment due on each account. If you cannot afford to do this, you should seriously consider going through credit counseling. Many of your creditors may consider re-aging your account, which could restore them to current status without having to catch up on payments.
Restoring current payment status to your accounts will help you regain many of the points lost when you fell delinquent. Understand though that your credit scores will continue to suffer due to the late payments that will remain a part of your credit history for 7 years. This effect is amplified during the first 6-12 months after a late payment.
When you fall behind, it is important to limit the damage by bringing the accounts current again as quickly as possible. More serious delinquencies are penalized by another risk code that measures the level of delinquency on accounts.
Falling behind on payments has serious consequences. Not only do you get hit with lower credit scores and higher borrowing costs, you also risk eventual legal action if the delinquencies are not corrected.
Missing a single payment on an account will cause the account to be labeled as “potentially negative” on your credit reports. If you bring that account current, it will take 7 years of error free usage before the account would return to positive status.
For this reason, it is generally recommended to immediately contact your lender if you ever miss a payment. There is a good chance that they may forgive the late payment, thereby saving you the late fee. More importantly, it would help you avoid the fallout caused by a late payment posting to your credit record.
For more serious delinquencies, you might need to talk with a reputable credit counselor about curing your delinquencies through a debt management program. If you cannot get caught up on your own, you need to ask for help.
Number of accounts with delinquency is credit bureau risk score reason 18. It is NextGen score code M1. 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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