The phrase “too few accounts currently paid as agreed” can show up on your credit report if you’ve missed payments on too many of your accounts. However, there are other reasons this could come up that don’t involve missed payments. The good news is there are ways to fix this and improve your credit score.
The last thing you want is to check your credit report and see any negative marks. Not only can this harm your finances, but it can also be demoralizing, especially if you’ve been working hard to boost your credit score.
If you’ve struggled with your credit in the past, then you may have seen the phrase “too few accounts currently paid as agreed” before. This phrase generally indicates that you’ve fallen behind on payments for too many of your accounts, but it could also indicate a different problem.
What “paid as agreed” means on your credit report
“Paid as agreed” is the phrase that appears on your credit report if you’ve been making your agreed-upon monthly payments on your debt. It can appear as the status alongside loans, credit cards, and other debts. In a perfect world, you would find this phrase next to each of your debt accounts on your credit report.
The meaning of “too few accounts currently paid as agreed”
Unfortunately, you may instead find the phrase “too few accounts currently paid as agreed” on your credit report. This phrase generally means one of two things, and the good news is it doesn’t always mean you’re behind on your debt.
First, as you would expect, the phrase “too few accounts paid as agreed” could indicate that you’re behind on payments on one or more of your accounts. It’s a sign to creditors that you may not make your monthly payments if they lend you money.
That being said, this phrase doesn’t always indicate too many missed payments. You could see it even if you have no late payments at all. Instead, this phrase on your credit report could simply mean you don’t have enough lines of credit in your credit history.
You see, credit bureaus and lenders generally use your history with debt as a way to gauge whether you’re a responsible borrower. If you’ve consistently paid off your debt in the past, they can assume you’re likely to do so in the future.
Unfortunately, you simply may not have enough credit lines on your credit report for credit bureaus to gauge your financial responsibility. Because they don’t have enough information to go on, they have to err on the side of caution and assume you’re not as creditworthy.
How “too few accounts currently paid as agreed” affects your credit
Your payment history is the single most important factor in determining your credit score, making up 35% of the calculation. As a result, having “paid as agreed” appear on your credit report is critical to landing a good credit score.
If you have “too few accounts currently paid as agreed” on your credit score because you’ve missed payments on one or more of your debts, then unfortunately it’s going to negatively affect your credit report. Depending on your credit score before the missed payment, you could lose up to 80 points for a payment that’s 30 days late and up to 130 points for a payment that’s 90 days late.
Even if your credit report says you have “too few accounts paid as agreed” simply because you don’t have enough credit lines in your credit history, it can still hurt your credit score. Two important factors in your credit report are the length of your credit history and your credit mix. Having a short credit history could affect them both, causing your credit score to remain lower than ideal.
The good news is that neither of these factors is as important as your payment history, so as long as you’re making your payments on time, having a limited credit history won’t cost you 100+ points overnight.
How to repair your credit after “too few accounts currently paid as agreed”
It’s easy to get discouraged by the phrase “too few accounts currently paid as agreed” on your credit report. You may feel like you’ll never master the credit score game. The good news is there are some things you can do right now to improve your credit.
Make on-time payments
As mentioned above, your payment history is the most important factor in determining your credit score. A single missed payment can cause a huge drop. On the other hand, consistently making your monthly payments on time will increase your credit score.
If you’ve struggled with missed payments in the past, focusing on making on-time payments will be the most effective way to turn your credit situation around. It may take a while for the on-time payments to outweigh the late ones, but you’ll get there eventually.
Consider opening new credit lines
If you’re struggling to boost your credit or have used debt irresponsibly in the past, then it might sound counterintuitive to open additional lines of credit. However, it may also help to boost your credit score.
As mentioned above, your credit report might say that you have “too few accounts paid as agreed” if you have a thin credit file with a limited payment history. By opening new credit lines, you’ll have more accounts that show they’re “paid as agreed,” and you’ll eventually bolster your positive payment history.
Once credit bureaus and lenders have more information to work with and see that you can use credit responsibly, you are likely to see your credit score increase.
Reduce your credit utilization
Another way to boost your credit score is to reduce your credit utilization. Your credit utilization is the percentage of your available credit that you’re using.
There isn’t necessarily a direct relationship between your account payment status and your credit utilization. But the reason it’s included on this list is that after your payment history, it’s the next most important factor in determining your credit score. Lenders and credit card companies generally want to see a credit utilization below 30%. If you’re using more than 30% of your credit, work on paying down your credit card balances to boost your score.
It’s worth noting that if you’re seeing “too few accounts currently paid as agreed” on your credit report, then you may also have a high credit utilization simply because you don’t have a lot of credit available to you. As discussed above, opening new lines of credit can help to address both of these problems.
Have a healthy credit mix
Remember that it’s not just about having credit accounts open; it’s also about having a healthy mix of different types of credit. Many people only have one type of debt on their credit scores, such as credit cards or student loans. But having a mix of multiple credit types, including installment loans and revolving debt, can boost your credit score.
Your credit mix isn’t the most important factor in determining your credit score — it makes up just 10%. However, multiple small changes will all compound into the results you’re after.
Keep your old accounts open
If you’ve worked hard to pay off your credit card, it’s natural to think you should close the account so you don’t go into debt again. Unfortunately, this can have several unintended consequences for your credit score.
First, closing a credit account — especially an old one — can reduce your average age of credit. Closing a credit account can also reduce the amount of credit available to you, therefore increasing your credit utilization. Finally, eliminating a line of credit from your credit report could harm your credit mix. All these factors combined can decrease your credit score.
How do I fix “too few accounts currently paid as agreed”?
You can fix having “too few accounts currently paid as agreed” in a few different ways, including making timely payments and opening additional lines of credit.
What does “account paid as agreed” mean?
If your credit report shows that an account is “paid as agreed,” it means you’ve made the monthly payment as agreed upon between you and your lender.
What does “too many inquiries in the last 12 months” mean?
When you apply for a new line of credit, you may see a small dip in your credit score, though this is usually temporary. However, if you’ve applied for many lines of credit, you may see a message on your credit report that indicates “too many inquiries,” which could be a bad sign to lenders.
What happens if you open up too many new accounts in a short period?
If you open up too many new accounts in a short period of time, you’re likely to see your credit score take a hit. Regardless of why you do it, it’s often interpreted as a sign of financial trouble.
- If the phrase “too few accounts currently paid as agreed” appears on your credit report, it could mean you’ve either missed monthly payments or have too thin a credit file.
- Missed payments can result in a major drop in your credit score — the decrease could exceed 100 points, depending on your starting credit score.
- Having too thin a credit history can also harm your credit score since lenders can’t tell if you can use credit responsibly.
- There are several ways to improve your credit score, including making on-time payments, opening new lines of credit, and reducing your credit utilization.
If your credit report shows that you have “too few accounts paid as agreed,” don’t panic. Yes, it could mean that you’ve missed payments on some of your debts. But it could also mean that you simply have too thin a credit file. Both of these issues can be fixed if you focus on being responsible with your finances.
If your credit report is too thin, consider adding a new credit card to your credit mix. Not only will it help lengthen your payment history, but it will also improve your credit mix and your credit utilization. See our list of the best credit cards on the market to read customer reviews, compare credit card features, and find the best card for you.
View Article Sources
- Reading a Credit Report & Designing a Credit Action Plan – Consumer Financial Protection Bureau
- Introduction to Credit and FICO® Scores – Financial Opportunity Center® Resources
- Too Few Accounts Currently Paid as Agreed – DebtorsUnite.org