FICO score after new credit

Berkster · ‎01-22-2012

Can someone clear this up for me? When a person applies for a credit card and they are approved for the credit card, I know the score may go down a tab bit if it is a hard pull. However, does that score go back up past where it originally was due to an increase in credit availability and low utilization. I'm not looking for a microwave effect but just an idea. I applied for a credit card and got it but my score dropped 2 points. It was a hard pull, so I do not know if 2 points is a bad thing or good thing in regards to an inquiry. Thanks

Starting Score: TU 710 EQU 715 EXP 698
Current Score: TU 815 EQU 836 EXP 823

Take the FICO Fitness Challenge

pizzadude · ‎01-22-2012

Assuming that your 2 point drop is from a FICO source, then it is not bad at all. Many times damage due to hard inquiries is minimal.

You also need to consider what adding a new CC does to your average age of accounts ( AAoA ). If you only have a few/young TLs or your reports then the negative impact to your AAoA is greater.

It is true that the decreased %util is a positive. But in terms of how adding a new CC will affect your FICO score, it will vary widely based on what is on your CR.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX

AndySoCal · ‎01-22-2012

Since you applying for new credit it would be hard pull.. Two points for inquiry is average. When the new account reports you will see the score go down further. Yes you will regain most if not all those points in a year plus or minus.

FICO Scores XPN v8 802 V2 831 (SDFCU) TUC 803 v8 EFX 807 (10/2023)
Discover 09/90 19,000, JCPenney 10/2008 4,700 US Bank Cash 12,000 Citibank Custom Cash 5/2015 11,100 State Dept. FCU 15,000 06/2023 , 02/2024 Redstone FCU Signature VISA 10,000 Banking: Ally Bank Credit Unions: Lafayette FCU Fortera FCU State Department FCU Pelican CU

Pelican State CU Redstone FCU

Berkster · ‎01-22-2012

My oldest account is from 1992 and the next one was in 1999 and the rest are in the early 2000's. So I should be okay there right?

Starting Score: TU 710 EQU 715 EXP 698
Current Score: TU 815 EQU 836 EXP 823

Take the FICO Fitness Challenge

pizzadude · ‎01-22-2012

@Berkster wrote:
My oldest account is from 1992 and the next one was in 1999 and the rest are in the early 2000's. So I should be okay there right?

The more accounts on your CR, the AAoA impact of a single new CC should be less ~ but again it really all depends on how many you have.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX

RobertEG · ‎01-22-2012

Simple math will give you an exact answer.

Add up the age of all accts reporting before the new one is added, and divide it by the number of accts.

Then, since the age of the new acct is 0, divide that same total age by accts + 1.

That's the initial AAoA impact.

llecs · ‎01-23-2012

And it's not just AAoA, any new account reporting can hurt. I've lost 20-25 on average due to new accounts reporting and most of the time my AAoA didn't change at all (FICO rounds AAoA down to the nearest whole number so it's possible for that not to change when new credit is added).

Good news is that any impact is short-lived at a year or so or less. YMMV. I've found that any lost points have returned within a year.