When the amount owed on accounts is too high

This is one of many reasons why you have less than a perfect credit score. If your credit report lists this reason, then you may need to address one of the biggest impacts on your credit scores.

“Amount Owed on Accounts is Too High” Credit Score Risk Factor Codes
Equifax Code 1
Experian Code 1
TransUnion Code 1
NextGen Code A3

Your balances impact 30% of the credit scoring formula. Simply stated, the more you owe, the lower your score. It is a bit more complicated though in terms of what the individual effects are.

Some people incorrectly take this warning to mean that their debt-to-income ratio is too high. FICO credit scores ignore income.

The largest factor that contributes to this error is a high debt-to-credit limit ratio, also known as the credit utilization ratio. This means that you may be using a dangerous percentage of your overall credit. Credit experts often recommend using no more than 30% of your available credit on revolving accounts. According to FICO spokesperson Craig Watts, credit damage actually begins when your balances exceed 10% of your credit limits.

Installment accounts can also prompt a similar error. When installment loans are fairly new, you owe nearly the entire amount originally borrowed. The proportion of balances to the loan amount is initially 100% when an installment loan is first opened. Credit scoring formulas reward you when you have paid off significant portions of installment loans, but this could take years.

If you see this warning of high amounts owed on one of your credit reports, you should consider paying down your balances. When able, send a much higher payment to reduce your credit card balances. Extra payments on installment loans should be marked as “for principal payment only” to make sure the payments are allocated properly.

You may find that you have no additional money to send to your lenders. In fact, you may even be having trouble getting by as it is. If this is the case, consider credit counseling as a means for developing your budget, evaluating options for getting debt free and reducing interest rates on your debt.

Otherwise, the next time you apply for new credit, your lender may deny your request. Their response may easily be that the amount owed on your accounts is too high.


The amount owed on accounts is too high serves as Code 1 on FICO scoring products and Code A3 on NextGen scoring. For more information about credit scoring, see the complete list of credit score factors.

Kenneth Long
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Kenneth Long

President at Debtors Unite
Kenneth Long is President of Debtors Unite, Inc. as well as President and Vice Chairman for Vision Credit Education, Inc. He served as a regional coordinator for the North Carolina Saves campaign. Long co-founded the Wake EITC Coalition along with Family Resource Center of Raleigh.

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
Kenneth Long
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