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Too Few Accounts Currently Paid As Agreed: What It Is & How to Fix It

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When you’ve applied for a loan or credit card and gotten denied, you’re given reasons for the denial that are sometimes confusing to understand. And finding derogatory marks on your credit report can feel like a gut punch, especially if you weren’t aware of any issues.

While too few accounts paid as agreed might mean that you’re behind on payments with multiple creditors, it has a more innocent meaning too. Read more to find out how this credit application response might not be as bad as you think it is. 

What Does “Too Few Accounts Currently Paid As Agreed” Mean?

Having too few accounts currently paid as agreed could mean one of two things. Either you’ve fallen behind on payments with multiple creditors or your credit file is just too new. Both of these scenarios will prevent you from getting the credit accounts you want. Let’s go over each one. 

There are a number of reasons why people fall behind on payments. The loss of a job or even health problems that led to financial hardship. No matter the cause, credit bureaus, and lenders see this as a red flag because delinquency and public records are major factors of bad credit.

From their perspective, this means you likely won’t make future payments if they approved you. Catching up on payments might feel like you’re scaling Mt. Everest, but it doesn’t mean bad credit forever. We’ll go over ways you can improve your credit report shortly.

The other reason behind “too few accounts currently paid as agreed” is that your credit history is too new. It’s also known as a thin credit file. You may have made your first few payments on a loan or credit card on-time, but you might still get this reason when applying for new credit. 

It means that you don’t have enough credit lines for lenders and credit bureaus to determine what type of borrower you are yet.

So while you haven’t made any mistakes, you’ll have to prove that you’re a responsible borrower with a few more accounts on your credit report.

How Do I Fix “Too Few Accounts Currently Paid As Agreed?”

Fixing this response comes with a few different steps. It will likely be a bit more difficult if you’ve fallen behind on payments because you’ll have to bring any past due accounts current before moving into the next steps. 

Once you’re back on track, you can move forward with improving your credit. For borrowers with limited credit history, it will be easier to solve this problem. To nail down the reason behind the derogatory mark, be sure to check your credit report first to confirm the issue.

Make Timely Payments

Making timely payments on all of your accounts is credit 101. Whether that consists of putting your bills on automatic payment, setting reminders on each due date, or budgeting enough money to ensure that each bill is paid. You have to make it happen. 

Your payment history is a track record of how well you’ve managed multiple payment obligations. It’s also a large chunk of how your credit score is calculated. It’s 35% of FICO credit scoring models to be exact. 

Open New Accounts

Once you’ve started cleaning up your payment history, you can begin opening new accounts. You might be wondering how you’ll open new accounts if you’re still climbing your way out of bad credit, but there are still options available to you.

Secured credit cards typically accept borrowers with bad credit. You’ll simply need to put up a security deposit, which then becomes your new credit limit. 

To avoid finance charges, pay it off as you make purchases. Be sure to keep making timely payments on any new accounts you open. 

Improve Your Credit Mix

Credit mix makes up 10% of your overall credit score. It might not seem like a big deal to have different types of accounts on your credit report, but it actually shows creditors that you’re capable of managing multiple forms of credit responsibly. 

If you only have one revolving account on your credit report, a lender likely won’t take the chance of approving you for an installment loan because you don’t have experience with it. To fix it, you’ll need to prove yourself by adding an installment loan to your credit mix. 

Keep Your Old Accounts Open

Paying off a credit card or other revolving account debt is a big accomplishment. So it’s no wonder why you might think to close the account after you’ve paid it off. However, this can actually have a negative impact on your credit score. 

Closing established accounts means the available credit is no longer open to you. This drives your credit utilization rate up. Plus, the years you’ve kept your account open are no longer part of your account age. For the best path to good credit, keep older bank revolving accounts open.

Reduce Credit Utilization

One of the best ways to improve your credit score is to pay down debt to reduce your credit utilization ratio. You can do this by paying extra towards revolving debts instead of just making the minimum payment. This helps you accomplish three goals:

  1. Pay down revolving debt faster
  2. Increase your amount of available credit
  3. Bring your credit utilization below 10%

By aiming to reduce your credit utilization, you’ll be on your way to a good credit score. You should aim to bring your utilization rate below 10% for the best results.

Things That Impact Your Credit Score

Your FICO credit score is impacted by five factors that are all used in the calculation of your score: 

  • Payment History: 35%
  • Credit Utilization: 30%
  • Age of Accounts: 15%
  • Credit Mix: 10%
  • New Credit Applications: 10%

Ideally, you want to have everything on your credit report listed as paid as agreed. Meaning you haven’t missed any payments and are currently in good standing with your creditors. Having one late payment of more than 30 days can hit your FICO score hard. 

Late payments that are 120 days to 180 days past due are considered to be in default and result in a public record or collections account on your credit report which is much harder to bounce back from since it causes major damage. 

Your credit score is also impacted by how many open accounts you have as well as the age of those accounts. Both of these factors contribute to a substantial credit file. 

How To Improve Your Credit Score

Improving your credit score is a journey that could change your life. With hard work and patience, you could go from missed payments to getting approved for the best credit cards, auto loans, and mortgages. 

To help you on your journey to building credit, use Credit Strong’s credit builder loan. Affordable credit builder loans allow you to build credit and save money at the same time. 

Just choose the plan that works best for your budget. As you make monthly payments, Credit Strong reports your payment history to all three credit bureaus to help you build good credit. It helps you by:

  • Improving your credit mix
  • Increasing the number of accounts in your credit report
  • Populating your credit report with positive payment history

To get started building credit with Credit Strong, you don’t even have to risk a hard pull on your credit. The application process is easy and fast. Plus most customers raise their score by 70 points within a year of on-time payments. 

In terms of credit score statistics, that could take you from having fair credit to good credit. Choose your affordable monthly plan today and build up to 120 months of credit history! 

FAQs

What Are Accounts Paid as Agreed?

Accounts paid as agreed means that you’ve met the payment obligations for the credit accounts you’ve held over the life of your credit history. This looks like on-time payments of the minimum amount owed on revolving accounts and full payments for installment accounts.

Does Your Credit Score Go up Every Time You Make a Payment?

Your credit score doesn’t go up every time you make a payment, but it does go up when you hit certain payment benchmarks–such as 100% on-time payments for six months, eighteen months, one year, or two years.

How Does “Too Few Accounts Paid as Agreed” Affect My Credit Score?

Having a derogatory mark like “too few accounts paid as agreed” will negatively affect your credit score. It basically tells the credit bureaus and potential lenders that you’re not able to make your payments on time or potentially at all. 

CreditStrong helps improve your credit and can positively impact the factors that determine 90% of your FICO score.

Start Building credit today
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