Hi there, new to the forum. This is a great resource. Thanks to everyone who contributes.
My FICO is currently at 725. My report shows $11K in revolving credit on 2 open accounts, of which I'm using 70% (I know, read on). I have $22000 in student loan debt. My average age of accounts is 6 years, I have perfect payment history and 1 inquiry.
I've had several significant credit events over the past 30-60 days that have not yet appeared on my report and I'm curious as to: a) when those events will effect my FICO; and b) to what extent (positivle or negatively)? I've tried to provide as much context as possible above and below.
1. In November I closed on a refinance of a mortgage that was previously in the name of my in-laws and wife. It's now in my name and my wife's name. Approx $180K. First payment to be made 1/1/14.
2. In mid-December I paid off approx. $7000 of the credit card debt.
3. Yesterday I was approved for the Chase Freedom card at a $1K limit. It's in the mail.
I'm expecting all of this to be a net benefit to my score, but I'm not sure about the mortgage and the additional credit card. I'm looking at possibly buying a new car soon and I'm wondering what kind of shape I'll be in come February/March.
Thanks in advance.
I'm not sure about the mortgage, but I expect that the greatly reduced utilization will dominate the HP + TL for the Freedom, giving you a gain.
Another angle here might be to revisit the DTI issue, and ask where you're at with monthly payments relative to your income.
Initally you will take a drop on your credit report because of the inquiries and the new account as it affect the AAoA. The good news is that you pay off your 70% of the credit card which should ease you with that drop. I would avoid apping for anything for atleast a year to let the inquiries lose affect to your FICO score and let it grow. Your credit should be much better come that time.
Thanks. My DTI is currently at about 25%. Would lowering that have significant effect?
I expect that the significant drop in utilization will dominate all the other changes and will be an overall good sized plus.
DTI doesn't affect credit scores at all.
I mentioned DTI not because it affects scores, but because it affects your ability to get approved for any sort of CC or other loan.
I believe that there starts to be concern around 35-40.