new credit cards = big drop in scores :(

[zeek69]

Hi all

I started rebuilding my credit last February with an unsecured orchard card ($300 limit). This was my only revolving credit reporting. After a few months my scores improved nicely and I decided to go for some prime cards. I received a Citi Cash Rewards ($2000) and a Chase Freedom (recon / $500). Well these have finally reported and my scores tanked by 20 - 50 points.

My TU went from 661 to 640 and my EQ went from 672 to 616 (only CITI has reported to EQ so it may turn out even lower when chase reports.)

My utilization shot up to 63% because I do not have the reporting dates down yet so I am sure this impacted the scores significantly.

Overall - this is pretty disheartening. I am hoping to apply for an AMEX in January (I have an old card, and can carry the memeber since date) and then be done with new credit cards. I know at this stage its all about time, low utilization, and responsible use.

[Anonymous]

I recently app'd for 5 cards and got 3.  At the same time I paid my util down from around 50% to somewhere between 1-2%.  You can see my before and after scores in my sig, but note that the TU scores dropped because my new accounts started reporting, but my lower util was not yet reflected on their report.  Although it technically lowered my util with having the extra available credit from the 3 new cards, it still tanked that score to have a high balance on two other cards.  On the reports where my payed off accounts were reported, the scores actually went up a little despite the new inqs and the new accounts which totally reaged my profile...

In my non expert opinion, you will probably see your scores come back up once you get your balances paid down.  Good luck.

[Anonymous]

Hummm...this scares me because I don't have any revolving debt, but I thought adding credit cards would raise my score. I was approved for a secured boa visa, but they haven't started reporting. I guess I'll wait until they report and then see what the simulator says if I open another account.

[zeek69]

SecondChance23

I think the drop in scores is a necessary evil. Sometimes you need to take a few steps back to move forward in the long run. You can't obtain high FICO scores without a good mix of revolving credit with positive history. And you cannot get that mix without having a drop in scores at first.

I guess what is most frustrating (at least for me) is that this is a long term process. I've seen people on this forum make amazing progress in a one or two years.

[Anonymous]

in the process of getting credit cards, you get hit for inqs, then new accounts (AAoA), then your util drops somewhat (so you get a boost), then you get util boosts as you pay down cards (if you haven't PIF'd yet) and boosts as AAoA goes up. it's a really gradual process ... it's really good to have TrueCredit or CreditSecure to check every day if you're shopping for a mortgage or auto loan. for credit cards I don't think it matters as much as long as you're in the range.