The negative factor- is that
FICO does not have a warning about "too much availible credit"
Closing these account will not change this- as you already took the HIT for the INQ and new accounts.
-
You've recently opened too many new credit accounts.
| Number of accounts you opened in the past year 11 accounts |
|---|
 About 54% of FICO High Achievers [?] did not open an account in the past year. Of those that did, about 27% opened just one account. |
- Your FICO score was hurt because you recently opened too many new credit accounts. Opening several credit accounts in a short time period may indicate a risk of future repayment - especially for people with short credit histories.
- What to do about this: Avoid opening more credit accounts at this time and as a general rule, if you don't need or plan to use credit, don't apply for it.
Bumperman wrote:
Hope I am posting this in the right spot.My score is 696 and that, according to Fico, is due to too much open credit. I had recently opened an account with (4 months) Home Depot which gave me a $10K credit line (scary) which all I did was buy a snow blower which I have since paid off. I also opened a Pier 1 account (same time frame) and a Chase business credit card. None of these do I carry any balances worth mentioning, but I think it has cost me on my score. After I paid off the snow blower from Home Depot, I closed it, was that a bad idea? I'm thinking of doing the same with Pier 1. I guess my question is: does it harm your score more to open an account just to take advantage of a discount towards a purchase, etc., and then immediately closing them, or to keep them open but paid and leave them alone forever?
Too much credit does not hurt score as far as I have seen.... But then how much is considered too much. I've seen people with hundreds of thousands of dollars in revolving credit and it did not change their scores. The crazy thing is seeing their score drop just the same as the rest of us when they run up high UTL... Yes they are able to max out too. It just goes to show give someone credit and they will use it.
Don't close accounts before 12 months if you can. You took the hit might as well gain what ever points it will earn you back. Canceling it may rob you earned history points. If you want to cancel your other card wait at least 1 year is my opinion. Having the available credit line is a good thing. Keeps down UTL to keep scores up.
As far as opening up too many accounts at once, I am guessing that negative factor will go away after 12 months too. Hasn't been long enough for me to test this properly.
Your score usually does drop quite a bit when you open a bunch of new accounts. There is more going on besides just inqs. You are making your average lower too, and so on.
Don't feel bad. I went on an app spree last year and took a whale of score drop (part of my plan, another story). It took many months, but my score bounced back. Yours will to. Just keep all this in mind next time you want to save a few $$ by apping for a new retail card. Sometimes it is worth it, and sometimes it's not.
Message Edited by ilovepizza on 03-23-2008 10:38 PM
Don't close accounts before 12 months if you can. You took the hit might as well gain what ever points it will earn you back. Canceling it may rob you earned history points. If you want to cancel your other card wait at least 1 year is my opinion. Having the available credit line is a good thing. Keeps down UTL to keep scores up.
As far as opening up too many accounts at once, I am guessing that negative factor will go away after 12 months too. Hasn't been long enough for me to test this properly.
Your score usually does drop quite a bit when you open a bunch of new accounts. There is more going on besides just inqs. You are making your average lower too, and so on.
Don't feel bad. I went on an app spree last year and took a whale of score drop (part of my plan, another story). It took many months, but my score bounced back. Yours will to. Just keep all this in mind next time you want to save a few $$ by apping for a new retail card. Sometimes it is worth it, and sometimes it's not.
Message Edited by ilovepizza on 03-23-2008 10:38 PM