12-30-2013 02:23 PM
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.
12-30-2013 03:26 PM
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.
12-30-2013 05:38 PM
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.
12-31-2013 06:58 AM
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.
12-31-2013 08:43 AM
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.