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OhioCPA
Posts: 461
Registered: ‎03-29-2011
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Re: Backdating


Revelate wrote:

CribDuchess wrote:

iMacDrew wrote:

ok well right, I understand that, but why do people wait till the beginning of the year to apply for Amex cards...


Because January is when you can get the most bang for your backdating.  Let's say you opened a Zync this month and so it reports as opened 7/2012 on your credit reports.  And then in January 2013 you opened a BCP.  The BCP would end up showing on your credit reports as being opened 1/2012, thus being 6 months older than your first Amex card (Zync in this scenario).  That's how the backdating works. :smileyhappy:


Doesn't quite work out like this mathematically I think.  For the individual tradeline, it will always be exactly X years older than today's date regardless of when you open it.  Stupid example:

 

Original account opened 2012.

 

New Account in 1/2013 = 1/12 backdate, one year history on the new tradeline

or New Account in 2/2013 = 2/12 backdate, one year history on the new tradeline

or New Account in 3/2013 = 3/12 backdate, one year history on the new tradeline

 

I was thinking about that the other day (and admittedly I've mentioned the whole January thing too), but the two most important things are:

- Cross a year boundary

- Open up any tradeline you want as soon as possible.

 

So if we're talking March or whatever, just open it (payment history counts afterall which backdating doesn't help with to my knowledge), but if we're talking November, then it's prudent to wait till January and take the additional year on backdating.  Not sure where it exactly breaks down in terms of better to wait or not, judgement call since everyone's situation is by definition different I guess.

 

From that analysis though, January should likely receive the statistical majority of the applications compared to other individual months, but it's not mandated to do so and might be deterimental if you're missing out on a bunch of payment entries by not opening it up ealrier.

 


The point of waiting until January is to get the extra months, not an extra year. I just opened my MB Platinum in July. It will show as 7/1984. If I waited until January it would be 1/1984, another six months older.

 

As I have pointed out in other threads, for someone with a thick file the extra few months isn't significant. For me, I wanted the INQ now and not six months later. That was the more significant issue for me.

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Re: Backdating


OhioCPA wrote:

Revelate wrote:

CribDuchess wrote:

iMacDrew wrote:

ok well right, I understand that, but why do people wait till the beginning of the year to apply for Amex cards...


Because January is when you can get the most bang for your backdating.  Let's say you opened a Zync this month and so it reports as opened 7/2012 on your credit reports.  And then in January 2013 you opened a BCP.  The BCP would end up showing on your credit reports as being opened 1/2012, thus being 6 months older than your first Amex card (Zync in this scenario).  That's how the backdating works. :smileyhappy:


Doesn't quite work out like this mathematically I think.  For the individual tradeline, it will always be exactly X years older than today's date regardless of when you open it.  Stupid example:

 

Original account opened 2012.

 

New Account in 1/2013 = 1/12 backdate, one year history on the new tradeline

or New Account in 2/2013 = 2/12 backdate, one year history on the new tradeline

or New Account in 3/2013 = 3/12 backdate, one year history on the new tradeline

 

I was thinking about that the other day (and admittedly I've mentioned the whole January thing too), but the two most important things are:

- Cross a year boundary

- Open up any tradeline you want as soon as possible.

 

So if we're talking March or whatever, just open it (payment history counts afterall which backdating doesn't help with to my knowledge), but if we're talking November, then it's prudent to wait till January and take the additional year on backdating.  Not sure where it exactly breaks down in terms of better to wait or not, judgement call since everyone's situation is by definition different I guess.

 

From that analysis though, January should likely receive the statistical majority of the applications compared to other individual months, but it's not mandated to do so and might be deterimental if you're missing out on a bunch of payment entries by not opening it up ealrier.

 


The point of waiting until January is to get the extra months, not an extra year. I just opened my MB Platinum in July. It will show as 7/1984. If I waited until January it would be 1/1984, another six months older.

 

As I have pointed out in other threads, for someone with a thick file the extra few months isn't significant. For me, I wanted the INQ now and not six months later. That was the more significant issue for me.



Nice!

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Revelate
Posts: 9,025
Registered: ‎12-30-2011
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Re: Backdating


OhioCPA wrote:

Revelate wrote:

CribDuchess wrote:

iMacDrew wrote:

ok well right, I understand that, but why do people wait till the beginning of the year to apply for Amex cards...


Because January is when you can get the most bang for your backdating.  Let's say you opened a Zync this month and so it reports as opened 7/2012 on your credit reports.  And then in January 2013 you opened a BCP.  The BCP would end up showing on your credit reports as being opened 1/2012, thus being 6 months older than your first Amex card (Zync in this scenario).  That's how the backdating works. :smileyhappy:


Doesn't quite work out like this mathematically I think.  For the individual tradeline, it will always be exactly X years older than today's date regardless of when you open it.  Stupid example:

 

Original account opened 2012.

 

New Account in 1/2013 = 1/12 backdate, one year history on the new tradeline

or New Account in 2/2013 = 2/12 backdate, one year history on the new tradeline

or New Account in 3/2013 = 3/12 backdate, one year history on the new tradeline

 

I was thinking about that the other day (and admittedly I've mentioned the whole January thing too), but the two most important things are:

- Cross a year boundary

- Open up any tradeline you want as soon as possible.

 

So if we're talking March or whatever, just open it (payment history counts afterall which backdating doesn't help with to my knowledge), but if we're talking November, then it's prudent to wait till January and take the additional year on backdating.  Not sure where it exactly breaks down in terms of better to wait or not, judgement call since everyone's situation is by definition different I guess.

 

From that analysis though, January should likely receive the statistical majority of the applications compared to other individual months, but it's not mandated to do so and might be deterimental if you're missing out on a bunch of payment entries by not opening it up ealrier.

 


The point of waiting until January is to get the extra months, not an extra year. I just opened my MB Platinum in July. It will show as 7/1984. If I waited until January it would be 1/1984, another six months older.

 

As I have pointed out in other threads, for someone with a thick file the extra few months isn't significant. For me, I wanted the INQ now and not six months later. That was the more significant issue for me.


Except I think (and I could be wrong) it works more like this:

 

Opened 7/12 = 7/84 which for AAoA purposes looks like the tradeline has been established 28 years (godlike backdate btw!)

 

Now run that forward, and in 1/13 you're at 28.5 years for AAoA and 6 months of payment history which I *think* is what gets counted for seasoning purposes, actual payments made but that's a WAG.

 

Compared to opening in 1/13 = 1/84 which would be 29 years backdate, but no payment history.

 

So yeah, you lose a small bit of AAoA (which in your case is laughably trivial but not everyone is so blessed), but I think the benefits you get otherwise regarding payment history outweigh things a bit and July being a middle month makes this a judgement call.

 

Now say you'd opened it in 2/12 instead, still 28 years AAoA, but by the time 1/13 rolls around, you're now at 28 years and 11 months AAoA wise, and 11 months payment history.  That's a no-brainer in my opinion over 29 years AAoA and waiting for an entire year to open up a tradeline which you want (presumably for some reason which applies to your current situation / needs).

 

Also I'd point out that AAoA in excess of call it 5 years (might be 4 from what DaveSignal recently posted) is pretty much gravy FICO score wise anyway, and as such the benefits of the additional tradeline with payment history in your case suggest opening it up immediately regardless; however, for a credit history newbie such as myself, AAoA is a much bigger factor.

 

My apologies for the rambling, hopefully this was somewhat coherent.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
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OhioCPA
Posts: 461
Registered: ‎03-29-2011
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Re: Backdating


Revelate wrote:


Except I think (and I could be wrong) it works more like this:

 

Opened 7/12 = 7/84 which for AAoA purposes looks like the tradeline has been established 28 years (godlike backdate btw!)

 

Now run that forward, and in 1/13 you're at 28.5 years for AAoA and 6 months of payment history which I *think* is what gets counted for seasoning purposes, actual payments made but that's a WAG.

 

Compared to opening in 1/13 = 1/84 which would be 29 years backdate, but no payment history.

 

So yeah, you lose a small bit of AAoA (which in your case is laughably trivial but not everyone is so blessed), but I think the benefits you get otherwise regarding payment history outweigh things a bit and July being a middle month makes this a judgement call.

 

Now say you'd opened it in 2/12 instead, still 28 years AAoA, but by the time 1/13 rolls around, you're now at 28 years and 11 months AAoA wise, and 11 months payment history.  That's a no-brainer in my opinion over 29 years AAoA and waiting for an entire year to open up a tradeline which you want (presumably for some reason which applies to your current situation / needs).

 

Also I'd point out that AAoA in excess of call it 5 years (might be 4 from what DaveSignal recently posted) is pretty much gravy FICO score wise anyway, and as such the benefits of the additional tradeline with payment history in your case suggest opening it up immediately regardless; however, for a credit history newbie such as myself, AAoA is a much bigger factor.

 

My apologies for the rambling, hopefully this was somewhat coherent.


Interesting idea regarding the number of payments being scored. While having two years of payments on an account might help with a manual review, I am doubtful that it is factored in by FICO.

 

I did notice on one of my credit reports, I believe it was EX, that my AMEX was not listed as my oldest tradeline. An account that I had opened in 2002 was listed in the summary. This makes me wonder if the CRA's don't track when a card first appears in a file.

 

When I first got back in with Amex last summer, I did see an increase in my score as a result of AAoA increasing. I believe it jumped from 5 to 7 as a result of three backdated cards reporting.

 

I opened my new account now because I wanted to take advantages of the benefits and didn't see a reason to wait until January. I also might be applying for a mortgage next summer so having all INQ's at a year or older was important to me.

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Revelate
Posts: 9,025
Registered: ‎12-30-2011
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Re: Backdating


OhioCPA wrote:

Interesting idea regarding the number of payments being scored. While having two years of payments on an account might help with a manual review, I am doubtful that it is factored in by FICO.

 

I did notice on one of my credit reports, I believe it was EX, that my AMEX was not listed as my oldest tradeline. An account that I had opened in 2002 was listed in the summary. This makes me wonder if the CRA's don't track when a card first appears in a file.

 

When I first got back in with Amex last summer, I did see an increase in my score as a result of AAoA increasing. I believe it jumped from 5 to 7 as a result of three backdated cards reporting.

 

I opened my new account now because I wanted to take advantages of the benefits and didn't see a reason to wait until January. I also might be applying for a mortgage next summer so having all INQ's at a year or older was important to me.


Payment history is the undisputed king of FICO; granted, that's in part because of how painful any derogatory is for an otherwise clean sheet, but it's pretty accepted that a six month tradeline is much better than a one month tradeline, and while that first seasoning date is the most important, I'd be moderately surprised if there weren't breakpoints at say 1 year, 3 years for mid / long term respectively.  Probably subject to diminishing returns but I think it's still there, otherwise AAoA would be a lot more important and it'd promote people opening cards and closing them immediately otherwise.... which is pretty laughable from a risk analysis perspective and doesn't demonstrate stability.  Think that's why I've always questioned AAoA at all as a measure of risk.

 

That's an interesting tidbit re: EX; what does it show for an open date on the newly backdated Amex?   It's possible that it's just in transition, no different than my current reports showing both the original BOFA card, and a duplicate tradeline after I PC'd it to the rewards version.  Hoping I can get my expense check in soon enough to fix my balances, as I think that second account has now dropped off in between when I got my FICO's, so if I take a hit next month from 4->3 revolving tradelines, guess I need to go open another but that's off-topic anyway.

 

Back more on topic, that's an good point regarding inquiries which I didn't factor into my post: I've pontificated that one of the benefits to opening up an account that you want, RIGHT NOW, is that the new tradeline penalty (including the inquiry) start aging immediately and FICO is completely time-dependent.   In your case, that clearly swings the judgement call on waiting or not clearly in the direction you chose, because even at Jan that inquiry is pretty meaningless score wise, but 1 year out is optimum in the run-up to a mortgage.  Looked at from that perspective, on the assumption you're actively using your file (which arguably from financial perspective you should be for something) 7/12 > 1/13 almost unilaterally I think, which pushes the judgement call range into the Aug-Oct range I'd think.

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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pozativelyliving
Posts: 237
Registered: ‎07-13-2012
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Re: Backdating

Is the actual year that the account is backdated to something random? Like do they all go back to the mid '80s or early '90s or can you always request a certain year when the account is opened? 

EX 638 (Lender 9/1) TA 650(Walmart 9/1) EQ 655 (FICO - 9/17)
Goal - 700 Club in '13!!!

My Wallet - Cap 1 - $300. Cap 1 - $750. Orchard - $950.
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-Cain-
Posts: 1,283
Registered: ‎04-06-2011
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Re: Backdating


pozativelyliving wrote:

Is the actual year that the account is backdated to something random? Like do they all go back to the mid '80s or early '90s or can you always request a certain year when the account is opened? 


It is backdated to the year you became an AmEx member most of the time. It may be different if you've had a troubled account with them previously.


Starting Score: EQ 681 5/2011, EX 656 6/2011 (PSECU), TU98 642 6/2011
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pozativelyliving
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Registered: ‎07-13-2012
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Re: Backdating

I had a few AMEX accounts starting from the early 2000s but they were included in my bankruptcy in '10. 

EX 638 (Lender 9/1) TA 650(Walmart 9/1) EQ 655 (FICO - 9/17)
Goal - 700 Club in '13!!!

My Wallet - Cap 1 - $300. Cap 1 - $750. Orchard - $950.
New as of 8/29 - Target - $3000. Barclay's - $2000. Merrick - $1000. Walmart $600. And as of 9/22 - JCP $200.

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