Too few accounts currently paid as agreed

[vanillabean]

"Your FICO® Score considers the number of accounts where you are paying your bills as agreed. In your case this number is too low because you have very few accounts or because you've missed payments recently on some of your accounts."

That’s what my DW’s EX 8 from an Amex card said. Which of course doesn’t make much sense at first.

Here’s what by the Experian Team had to say on the topic. If not late payments, "it is likely the result of either a short credit history or a “thin” credit history, or both.”

Too few accounts? Experian seems to think so. here at myFICO also discusses the thickness of accounts, with six being a pivotal number. DW has seven credit card accounts (and I have six). At this time, the only balance is on a credit card.

And then I was reminded that credit reports don’t really know what to make of revolving accounts zeroed by the statement date. Was it charged and paid or simply inactive? My experience is to get an OK (currently paid as agreed) for either every month.

Thomas_Thumb put it this way. "If you have either AU accounts or open accounts that are considered "inactive" that could put you in the "too few" category.” The operative word appears to be “considered”.

[Glen_M]

With seven revolving accounts, the only thing I can think of is that a couple of them might not be reporting if they're not being used.  If you get a full report from the agency and see a much of "N/A" or "no information" entries, it would make sense.

[Anonymous]

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@vanillabean wrote:

DW has seven credit card accounts (and I have six). At this time, the only balance is on a credit card.

And then I was reminded that credit reports don’t really know what to make of revolving accounts zeroed by the statement date. Was it charged and paid or simply inactive? My experience is to get an OK (currently paid as agreed) for either every month.

Thomas_Thumb put it this way. "If you have either AU accounts or open accounts that are considered "inactive" that could put you in the "too few" category.” The operative word appears to be “considered”.

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Of your DW's accounts, it sounds like a number may be $0 balance credit cards that may have not been used in a while.

Would you mind telling us what these 7 accounts are, account type (installment or revolving), whether it is an AU account or not, whether it is closed or open, whether the balance is $0 or more, and when the last payment was made on that account (best guess month/year)?  e.g.

Chase Freedom.  Revolving.  Not an AU.  Open.  $0 balance.  Last Payment Oct 2016.

Just a week ago we were trying to speculate on whether certain FICO models might operationally define an account as inactive if it had a DOLA (State of Last Activity) that was a long while ago.   For accounts in good standing the DOLA is the date that the last payment was made.  The DOLA is a field provided by the creditor to each CRA and is in the CRA database.  FICO would certainly have access to it, though it's not clear if they use it.

Thus perhaps the Chase Freedom account in the example above would be declared inactive, since it has a $0 balance with the last payment made > 7 months ago.  Again, just speculation, especially the 6 month cutoff.  Maybe there's no cutoff of any kind, or maybe it is 12 month, etc.  If you could confirm that all of the $0 cards had a recent DOLA that would tend to clarify that this was not the issue involved.

[vanillabean]

All cards are used every month. Seven credit cards, no installment loans. EX 8 of 847.

[Anonymous]

How many of the seven cards are AU cards?

[Thomas_Thumb]

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@Anonymous wrote:

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@vanillabean wrote:

DW has seven credit card accounts (and I have six). At this time, the only balance is on a credit card.

And then I was reminded that credit reports don’t really know what to make of revolving accounts zeroed by the statement date. Was it charged and paid or simply inactive? My experience is to get an OK (currently paid as agreed) for either every month.

Thomas_Thumb put it this way. "If you have either AU accounts or open accounts that are considered "inactive" that could put you in the "too few" category.” The operative word appears to be “considered”.

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Of your DW's accounts, it sounds like a number may be $0 balance credit cards that may have not been used in a while.

Would you mind telling us what these 7 accounts are, account type (installment or revolving), whether it is an AU account or not, whether it is closed or open, whether the balance is $0 or more, and when the last payment was made on that account (best guess month/year)?  e.g.

Chase Freedom.  Revolving.  Not an AU.  Open.  $0 balance.  Last Payment Oct 2016.

Just a week ago we were trying to speculate on whether certain FICO models might operationally define an account as inactive if it had a DOLA (State of Last Activity) that was a long while ago.   For accounts in good standing the DOLA is the date that the last payment was made.  The DOLA is a field provided by the creditor to each CRA and is in the CRA database.  FICO would certainly have access to it, though it's not clear if they use it.

Thus perhaps the Chase Freedom account in the example above would be declared inactive, since it has a $0 balance with the last payment made > 7 months ago.  Again, just speculation, especially the 6 month cutoff.  Maybe there's no cutoff of any kind, or maybe it is 12 month, etc.  If you could confirm that all of the $0 cards had a recent DOLA that would tend to clarify that this was not the issue involved.

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A  key point on AU accounts and whether or not Fico 8 considers them is use of the AU account. I had a CC in my name on an account where I am an AU. I lost the card 15 years ago. I rarely used it so it was never replaced. I strongly suspect that non use is a criteria Fico 8 uses to trigger AU anti abuse which then ignores the account (for the AU even though it shows on CRA reports as active (primary holder uses card every month). As we know, older Fico  models always count AU accounts.

[vanillabean]

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@Anonymous wrote:

How many of the seven cards are AU cards?

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None.

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Thomas_Thumb wrote: 

A key point on AU accounts and whether or not Fico 8 considers them is use of the AU account. I had a CC in my name on an account where I am an AU. I lost the card 15 years ago. I rarely used it so it was never replaced. I strongly suspect that non use is a criteria Fico 8 uses to trigger AU anti abuse which then ignores the account (for the AU even though it shows on CRA reports as active (primary holder uses card every month). As we know, older Fico  models always count AU accounts.

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We use the AU cards every 2-4 months, but all of them consistently are not used for utilization.

For the card that you lost, don't you get sent a new card every four years or so?

[Anonymous]

Hey Vanilla!  I am a little confused.  In your reply to me, you mention that none of your wife's accounts are AU accounts.  But then in your reply to TT, you say that "We use the AU cards every 2-4 months."  Does that mean that she is an AU on none of your cards but you are an AU on some of hers?

So just so I can understand.... on your wife's reports, are there AU accounts?  How many open AU accounts and how many open accounts in her own name?

Just trying to wrap my head around her profile and what it looks like. 

[Revelate]

Short credit history is something else in the Amex translation of the reason codes, namely:

2) Length of time accounts have been established

I'm not going to re-open our debate on inactive tradelines though I think we as a community are flatly wrong on that and sans testing are just spitting into the wind, and I'm also suspect of needing 6 accounts from a FICO scoring perspective... I know without a doubt that came from the MF "High Achievers have an average of six accounts" or whatever that stupid moniker is in the myFICO interface, and to reiterate that makes absolutely no difference on the algorithm as it's exactly how Credit Karma came up with their recommendations and is therefore worth exactly as much.

I'm leery of reason codes near 850 honestly, basically they fall into categories that cannot be argued with: short history, not long enough revolving or installment tradelines, or even not enough accounts... though this last one may vary by scorecard, maybe.  

If AU's haven't been tested, that might be a thing if they aren't counted but even so at 5 accounts (5 + 2 AU's?), I just find the concept that it's a thin file laughable, but it's just data I guess end of the day which we don't have access to.

Also zero tradelines that are recently updated (DOLA), I suspect that's no problem otherwise a lot more people would get that complaint IMO given how zealous people are about AZEO around here.

[vanillabean]

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@Anonymous wrote:

Hey Vanilla!  I am a little confused.

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Only primary cards were listed. DW is primary on 7 and AU on 2 (I am primary on 6 and AU on 3). The primary cards include one joint card. All of these are open.

Our AU accounts aren’t used by FICO. An example: DW and I were recently at $0 debt including installment accounts. One of her cards reported a balance, and her EQ 8 increased by the expected 29 points, the number of points that both of us dropped just before entering no debt. I’m AU on that card and had a change of zero points. When one of my primary cards reported a balance, my EQ 8 increased by 29 points.

Also, I had made a charge on that AU card during the cycle, but that didn’t make a difference, which actually makes sense to me because I don’t think AU usage is explicitly reported to the credit bureaus.