Score just fell due to new account opened in May...how long to bounce back?!

[mlb2009]

A personal loan that I took in May has just been reported on my credit. It made my score dive down 40 points!!! The score alert says it should go back up...it went down only because a new account was added. It was only a loan for $1,000 and I've made payments on time every month. How long before my score bounces back up?

[atarvuzdar]

40 points hurts, I'm sorry to hear that. Assuming the loan isn't reporting any late payments to cause the drop, and assuming no other accounts also updated around the same time with negative information to contribute to that drop as well, I would wager that most of those points would return within 6 months and much of the remaining loss will return within a year. If the new loan dropped your average age of accounts below a certain threshold then you will also have to wait for your AAoA to get back to that point. The good news is that if this also improves your mix of credit types (for instance, if you only have CC's on your report besides this loan) the loan will add some points if you pay it on time because it shows you can handle different types of credit.

[mlb2009]

6 months!?!? That really stinks! I've worked so hard only to have my score fall that much . The account hasn't been late. My goal is to pay it off quickly, so my score can bounce back in a more timely manner.

Thanks for the info.

[atarvuzdar]

FYI you'll probably see small score increases over the course of the 6 months, probably starting around the third month.

[Shogun]

Might have been re-bucketed.  This happens some times and you will see a drop and then a steady climb.