@iced wrote:I just pulled a report for Experian today (they feel like the harshest critic to me), and noticed one of my negative score factors was too few accounts paid as agreed. I have read posts about people running into this before, but they also usually had a short credit history and/or very few accounts. In my case, I have 7 open accounts (1 real estate/2 installment/1 store/3 credit) with an AAoA of over 7 years, according to Experian. My newest account is about 3 years old.
The only change from last month is I closed one of my cards out, so I went from 8 to 7. This is concerning since I’m planning on closing another card out in a few months. I also understood the recommended number for high scores was 6 accounts.
If 6 is good enough for perfect, why is 7 a factor dragging me down?
I think you're just fine. I don't really believe it's pulling you down. They just have to throw in something.
@iced wrote:I just pulled a report for Experian today (they feel like the harshest critic to me), and noticed one of my negative score factors was too few accounts paid as agreed. I have read posts about people running into this before, but they also usually had a short credit history and/or very few accounts. In my case, I have 7 open accounts (1 real estate/2 installment/1 store/3 credit) with an AAoA of over 7 years, according to Experian. My newest account is about 3 years old.
The only change from last month is I closed one of my cards out, so I went from 8 to 7. This is concerning since I’m planning on closing another card out in a few months. I also understood the recommended number for high scores was 6 accounts.
If 6 is good enough for perfect, why is 7 a factor dragging me down?
It is unlikely that the "too few accounts paid as agreed" is really having a significant negative impact on your score. Below is a paste of the reason statement and associated info taken directly from an Experian document.
Note: I have 1 open loan (mortgage), 1 charge card, 1 AU credit card and 4 revolving credit cards. The AU card counts for nothing in Fico 08 for me. So I effectively have 6 open accounts - all of which all show activity. If you have either AU accounts or open accounts that are considered "inactive" that could put you in the "too few" category. Check your credit report details for each open account under "status". Perhaps some accounts are not reporting payment status.
Overall, it is best to have at least 3 open revolving credit cards that are not AU status. Maintaining 4 or 5 open is better as that adds some flexibility. "Perfect" Fico scores can be achieved with 20 or more open accounts so no NEED reduce to 6 total from 7. Dropping another account won't improve score potential.
I would not say 6 total open accounts is "optimum" for high scores - although it is sufficient for 850 scores (as long as there is an open installment loan).
Note: You will receive at least 2 reason statements (often four statements) on factors that may be impacting score until score is above 800. The reason statements come from an automated system and the top two listed usually have some validity although impact may be minor.
As mentioned before, having 3 or more, non AU, open revolving accounts is very helpful in achieving high scores (above 800). Best to also have an open installment loan that is "substantially paid down" for top tier scores (above 820).
