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Rags to Riches...Major Credit Moves...What kind of impact?

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DanaC
Member

Rags to Riches...Major Credit Moves...What kind of impact?

Hello,

 

I started out June with a pathetic 526 across the board.  After a lot of determination, quite a few PFDs, disputes, and a complaint to the CFPB, I was able to wipe out every negative entry and even a judgement that was on my Credit Report.   I had my father add me to a couple of his credit cards, since he has sparkling credit and long-time history, and it gave me the history lenders were looking for, even though I was only an AU. 

 

I have never been approved for any line of credit in my life, only "piggy-backed" onto other accounts.     

 

I applied for a mortgage loan 08/09/13 and somehow, was APPROVED!!!  I just closed 09/04/2013, with $21K+ cash out to spare. I took this cash and paid off my credit card, which was about 50% utilization, and paid off the auto loans my dad had financed in his name for me. 

 

I was just approved for a Discover It credit card (my first real cc!)  and noticed my score went down 4 points immediately. 

 

My question is:  Does the reporting of a mortgage and credit card generally improve your credit, over time? (Assuming on-time payments and low utilization?)  Will the credit card I paid off help make up for the 4 points I lost when I applied for my Discover card?  Just wondering what to expect when the mortgage and new credit card hit my reports. 

 

Thanks!     


Starting Score: 526
Current Score: TU 730 EXP 715 EQ 705/b>
Goal Score: 750+

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Message 1 of 8
7 REPLIES 7
asphaltcowboy
Valued Contributor

Re: Rags to Riches...Major Credit Moves...What kind of impact?

Congrats on your success, you probably took a small hit on your score

for the inquiry with Discover, those get you right off the bat, your score will only improve

as your accounts age and on time payments,  Again congrats on the new home and CC


Starting Score TU 667 EQ 663 EX 655
Current Score TU 778 EQ 776 EX 781 Last Update 4/2016
Garden Club 04/10/2013
Message 2 of 8
tinuviel
Moderator Emeritus

Re: Rags to Riches...Major Credit Moves...What kind of impact?

Congrats on your improved credit situation, your new Discover, and especially your new home!

 

You are experiencing what is known as the new credit ding. Inqs affect your credit score, but fade after the first few months and then cease to affect your FICO scores entirely after a year. New accounts reporting likewise will cause something of a score drop. The good news is that all of this fades over time and, with positive reporting from both the credit card and the mortgage, you should see your scores bounce back and eventually become even higher than they were before the new credit. Take good care of your accounts and all will be well. Smiley Happy


Current Scores: EQ 775 (03/04/2014), EX 756 (03/01/2014), TU 760 (03/01/2014)
Ruby Spade Garden Club Member - Last App: 03/04/2013 - No apps until 2014
Cards: Cap1 Venture 6.4k, Cap1 Quicksilver MC 1.75k, BankAmericard 1-2-3 Visa Signature - UCF Alumni Association 5k, Discover 7k, Citi Diamond Preferred MC 10.35k, Wells Fargo Rewards Visa 7k, Chase Freedom 5k, Chase Ink 7.5k, Amex Green NPSL, Dillard's Amex 7.5k, JC Penney 7.5k, Kay Jeweler's 5.1k
Message 3 of 8
takeshi74
Senior Contributor

Re: Rags to Riches...Major Credit Moves...What kind of impact?

4 points isn't anything to worry over IMO.  Keep in mind the usual suspects with credit scoring: payment history, utilization, AAoA, derogs, inquiries etc.  Payment history and AAoA both take time.  If you're keeping utilization in check then, yes, it will improve over time.  The impact from inquiries falls off relatively quickly.  After 1 year you shouldn't see much, if any impact and after 2 years they're gone.

 


@DanaC wrote:

Will the credit card I paid off help make up for the 4 points I lost when I applied for my Discover card?      

?

It will.  50% to 0% is significant.

 

Again, this is going to take time and a 4 point drop in the short term isn't anything to worry over if you manage things as you said you would.  While you do want to keep an eye on your score to ensure that you're improving your credit it's not really that important until you're ready to app.  From the sound of it, you just need to properly maintain things for now.  Congrats and good luck with it!

Message 4 of 8
myjourney
Super Contributor

Re: Rags to Riches...Major Credit Moves...What kind of impact?

Congarts on the new nome and cards..... Bravo

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Message 5 of 8
09Lexie
Moderator Emerita

Re: Rags to Riches...Major Credit Moves...What kind of impact?

What a summer you had! Congrats on taking care of your baddies and your new homeownership. Yes, mortgage and rev history will help your credit profile. You will see a ding from the inq's and initial reporting but they are temporary.

Message 6 of 8
DanaC
Member

Re: Rags to Riches...Major Credit Moves...What kind of impact?

Thanks, everyone!  Just wanted to update, the new line of credit (the Discover It card) BOOSTED my score by 44 points.  I'm at a 715 as of today, can't wait to see what happens once my reports show I paid off my other CC in full! 

 

I could never have done this without all the wonderful advice on these forums, thanks everyone! 


Starting Score: 526
Current Score: TU 730 EXP 715 EQ 705/b>
Goal Score: 750+

Take the myFICO Fitness Challenge
Message 7 of 8
hot4u
Established Contributor

Re: Rags to Riches...Major Credit Moves...What kind of impact?

Congrats Smiley Happy


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