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New Contributor
butterflyblu
Posts: 67
Registered: ‎03-08-2009
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Does score increase?

 

Do credit scores increase with any new credit, credit cards, loans etc as long as utilization is low?

Frequent Contributor
Dadaluma83
Posts: 364
Registered: ‎08-23-2011
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Re: Does score increase?

They do increase on the portion that calculates utilization, but since a brand new account shows up that will lower the average age of accounts and you will take a score hit there.

 

Not completely sure but in most cases it should be a net decrease on the score.

FICO Scores: TU: 768 (Jan 2012), EQ: 755 (Jan 2012 Lender pull)
New Contributor
butterflyblu
Posts: 67
Registered: ‎03-08-2009
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Re: Does score increase?

That makes sense thanks for the reply!

Valued Contributor
thom02099
Posts: 1,348
Registered: ‎08-30-2011
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Re: Does score increase?

I've actually seen a net INCREASE in score.  Initially you take a ding for the inquiry, but you get it back and (usually) plus 5 points for the new TL; it may, however, take several months to see that increase (plus 5).  I opened 5 new accounts at the same time, took a minor ding, but now the TLs are reporting so I'm gaining back what I lost.  This is also taking into consideration that you don't run up huge balances, keep your utilization low. 

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EX = 799 EQ = 812 TU = 811 - 11/2014
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haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
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Re: Does score increase?


butterflyblu wrote:

 

Do credit scores increase with any new credit, credit cards, loans etc as long as utilization is low?


If you currently have no open revolving credit, or maybe just one open revolving account, your score will generally increase immediately with new accounts until you hit 2 or 3 total. That's because revolving credit is so important to your FICO scores that you "need" two or three healthy open revolving accounts (OK, I'm tired of typing "revolving accounts", so I'm going to start typing CC's) for best scores.

 

If you currently have no open installment accounts (this includes mortgages), opening a loan will generally help pretty much right away. This is because adding an installment account helps your credit mix.

 

If you already have more than three open revolving accounts and an open installment account, any additional accounts will probably drop your scores a bit initially, but as they remain open and healthy <-- that part's important --your scores will increase over the long run, all else being equal.

 

Some people will see some individual variation on the above, depending on their age of credit, presence of negatives, etc., but this does apply in most cases.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
New Contributor
butterflyblu
Posts: 67
Registered: ‎03-08-2009
0

Re: Does score increase?

Perfectly put thanks for the clarification, I swear I learn something new on here every single day!


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