Adding credit card would increase score?

[SouthJamaica]

I presently have13 revolving cards.

My Experian FICO 8 simulator said I would increase my score by 5 points by applying for and getting another credit card.

What?

[CH-7-Mission-Accomplished]

The FICO simulator has been smoking crack.

[Anonymous]

But it would also tell you how large a SL it would need to be to raise it 5 points.

As I'm typing this, I'm looking at EX CT. It is telling me that adding a new CC with a $5000 Sl would lower by score by 5 points. Also, if I add a new card and it has a SL from $6000 to $21000, I would gain NO points. it is only after the SL is plus $21000 that I would gain 5 points.

So me getting a new Chase Sapphire with a SL of $30,000 would only give me 5 measly points. Great limit, bad point increase. Even a $50,000 new card would still only give me 5 more points.

The moral of this story is that ever profile is different, and some things will move a profile more than others for different people.

[CH-7-Mission-Accomplished]

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@Anonymous wrote:

But it would also tell you how large a SL it would need to be to raise it 5 points.

As I'm typing this, I'm looking at EX CT. It is telling me that adding a new CC with a $5000 Sl would lower by score by 5 points. Also, if I add a new card and it has a SL from $6000 to $21000, I would gain NO points. it is only after the SL is plus $21000 that I would gain 5 points.

So me getting a new Chase Sapphire with a SL of $30,000 would only give me 5 measly points. Great limit, bad point increase. Even a $50,000 new card would still only give me 5 more points.

The moral of this story is that ever profile is different, and some things will move a profile more than others for different people.

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FICO does not factor your credit limits into your score beyond a utilization calculation.  If your accounts were all paid except one account had a $5 balance, and you opened a new $500 limit card or a new $50,000 limit card it would not have a FICO score impact.

Now some of the FAKO models like to see 5K or 10K limits, but FICO is neutral as to credit limits.  

Since FICO does not discriminate based on your income, and only those with an income high enough to support higher limits can get higher limit cards, it would discriminate based on income level, which it does not do.

Higher limit cards are always nicer than lower limit cards, but they have no impact on FICO aside from lowering utilization percentage.

[Anonymous]

I am fully aware of that. And did not imply otherwise. Still this illustrates the effect or lack thereof of adding a card at different SL.

[CH-7-Mission-Accomplished]

What do you mean by "Still this illustrates the effect or lack thereof of adding a card at different SL"?

It has no effect on FICO score.  Do you mean some other effect?

[Anonymous]

If you add an account and are trying to effect your util rate, even by adding a card with a high SL, the effecct might be marginal as in my example.

That's all I was trying to convey. You don't need to respond. Thanks. You've made your point.

[Thomas_Thumb]

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@SouthJamaica wrote:

I presently have13 revolving cards.

My Experian FICO 8 simulator said I would increase my score by 5 points by applying for and getting another credit card.

What?

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You can get to Fico 850 with 5 credit cards - if the cards have a combined CL that allows you to maintain aggregate utilization under 10%.

However, credit mix does come into play so lack of an installment/mortgage loan would be a limiting factor. Also, although a closed installment/mortgage loan will count toward mix, not having an open/active loan may also be a limiting factor. Quite a few people have reported some score drop when installment loans are paid off and closed.

[CH-7-Mission-Accomplished]

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@Thomas_Thumb wrote:

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@SouthJamaica wrote:

I presently have13 revolving cards.

My Experian FICO 8 simulator said I would increase my score by 5 points by applying for and getting another credit card.

What?

---

You can get to Fico 850 with 5 credit cards - if the cards have a combined CL that allows you to maintain aggregate utilization under 10%.

However, credit mic does come into lay so lack of an installment/mortgage loan would be a limiting factor. Also, although a closed installment/mortgage loan will count toward mix, not having an open/active loan may also be a limiting factor. Quite a few people have reported some score drop when installment loans are paid off and closed.

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I don't believe that closed installment or mortgage loans do count for credit mix.  If this were true it should hold true for credit cards and closed credit cards are not counted and your scores tank.  I have old mortgage loans reporting and old auto loans, all paid off, and I am not getting the benefit of cedit mix.  I do have major bank cards, a couple store cards and a credit builder installment loan, though.

[Thomas_Thumb]

Closed credit cards do not count toward available utilization. 

However, closed CCs are included in the # of accounts and average age of account factor calculations used in scoring. Closed mortgages, if still on your report, also count toward the # of accounts factor.

I closed a CC with 20 active years of credit history 10 years ago (didn't know any better). It fell off my credit reports in June. My AAoA dropped 2 years as soon as the account fell off. Although a closed account does not accumulate years,  the total # years open is considered in AAoA while it remains on your report. Unfortunately this means new accounts closed after only a year or two will have a lingering negative impact on AAoA because they don't age.

I paid off a 15 year mortgage 10 years ago and it fell off my credit reports last month. The total number of accounts summary on my CB reports dropped from 12 to 10 due to the closed CC and mortgage accounts dropping off my report.