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I'm pretty sure the hit to your score will be temporary--the effect of the new inquiry on your score will be gone in a year, and a new tradeline with $1500.00 to include in your utilization calculation will also help. In general, keep all accounts active, but showing a $0 balance on your credit reports, except keep a balance on 1 credit card, showing 9% or less utilization (so on a credit card with a $1500 balance let no more than $135 report). In order to do this just make sure you pay the balances on your accounts BEFORE the credit card companies even issue your statement.
Anyway, long story short, this new credit card will probably benefit you in the long-term for the inconvenience of the score drop in the short-term.
I would also call them up and ask them to just show the same "date opened" on your new account as was on your old account. It won't hurt one bit to call and ask.
Good luck!
@naf wrote:
I'm sorry, I don't understand half of what is said or how this whole complicated process of credit scoring works. I re-opened the account last week and it's already hit my credit account and my score dropped TWENTY points. I have paid off all but one of my credit cards, that was months ago, and I still show having several cards with balances. Yet I replace a closed card and it shows up in less than a week. Unbelievable. I truly want to scream. Actually, at this point I'm tempted to just bury whatever money I have under a tree in the backyard and give up on credit entirely!
Everyone generally only updates once a month. Your cards won't update their balances until the next bill comes, and then within a few days, they will show whatever balance was due on your bill. The new account shows up based on when you apply for a new account. Some are quicker than others to report new accounts, but there's a reason it shows up on a different timeframe. There's nothing to report until you apply, and then there's a new account.
You'll likely have those 20 points back in 6 months. As others have said, see if you can get your date opened changed to the same date as the old account. Can't hurt to ask. I wouldn't dispute anything with the CRAs. It doesn't seem like you have anything that is inaccurate, the dispute is just goiing to come back verified, and you might end up with a dispute comment on the tradeline that you'll later need to have removed if you want to apply for a mortgage.
All in all, your score is still a great score. It will rebound fairly quickly. I'm guessing you have a fairly thin file? 20 points is a lot to lose for adding one new account. As your AAoA improves over the years, adding one new account shouldn't hurt that bad. How many accounts do you have?
Is there a purchase in your future that you are worried about? (House, maybe?)
Because, a 780 to a 760 is not as bad as a 630 to a 610. I understand you worked hard to get to that, but it'll go back up.
If you are worried about the AAOA, just give them a call and see if they can backdate it and hook you up.
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@naf wrote:
You're right, I'm probably overreacting - there is nothing coming up that I need a higher score. It's just that I worked so hard to get it that high and then something that stupid drops it so much. Guess I'll just have to sit tight and wait. Thanks.
In that case, I'd be a lot happier about the fact that I saved $250.
That's a hell of a lot of savings.
Do you know how many credit reports/scores you could buy with that!?!
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Average Age of Accounts
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