You may have seen “level of delinquency on accounts” as a reason for denial of credit. The very best loans and credit offers will not be available if you have signs of previous delinquencies on credit accounts.
When you are late on a credit account, that missed payment can be reported to the credit bureaus by the lender. There is no legal requirement that they do so. Creditors often choose to voluntarily report such information to credit bureaus in order to motivate you to catch up your payments.
| “Level of Delinquency on Accounts” | Credit Score Risk Factor Codes |
| Equifax | Code 2 |
| Experian | Code 2 |
| TransUnion | Code 2 |
| NextGen | Code D6 |
If do find that you forget to make a payment, it is very important that you contact the lender to request forgiveness for the late payment. You might get them to waive the fee, but the primary focus should be to keep them from reporting the late payment. Many credit card companies will provide this courtesy to you upon request if you have not been late on any payments within the prior 12 months.
Should a late payment be reported, it will remain in your credit history for 7 years. While the greatest penalty is within the first couple of years following a missed payment, it will continue to blemish your credit for a full 7 years.
Delinquency on accounts is a negative input in the credit scoring formula. Your payment history is responsible for approximately 35% of your credit score, making it the biggest component of your credit.
When delinquencies have occurred, there is little that you can do to fix these records. If you can prove that the delinquency was due to substantial fault of the lender, then you may be able to dispute the record with the credit bureaus. You may be more successful however convincing the lender to update what they report to the credit bureaus so that the delinquency no longer appears.
Legitimate delinquencies are nearly impossible to erase from a credit report. Credit repair companies, despite their claims, cannot remove these from your credit report any more than you can.
When you have previous delinquencies on your accounts, time may be the best fix. If you have been denied credit, you definitely need to wait before applying for another account. Remember that multiple inquiries in a 12 month period can lower your scores.
Give it some time before you apply for another account. You may also want to consider rebuilding your credit by taking out a small secured loan through your bank or credit union. Paying off one of these can partially offset the damage caused by prior delinquencies on your other accounts.
The level of delinquency on accounts is Code 2 on FICO scoring products and Code D6 on NextGen scores. For more information about credit scoring, see the complete list of credit score factors.
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
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