FICO score miscalculation after new credit account opened?

[bdhu2001]

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@SouthJamaica wrote:

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@Anonymous wrote:

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@SouthJamaica wrote:

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@Anonymous wrote:

Hi All,

Some background.  21 years old.  Chase Freedom $6k CLI opened Nov 2014 (14 month history).  Citi DoubleCash $2.7k CLI opened June 2015 (8 month history).  And most recently, Chase Sapphire Preffered $16k CLI opened late December 2015 (1 month history).  

I was poking around for new cards in December, thinking maybe amex, but I checked and found out I was pre-approved for the Sapphire Preffered card.  I was elated!  There was a "Spend 4k in 3mo / 50k miles" offer on the table which I had every intention of picking up.  I put around $2.5k on it in January (15% util).  My Freedom and Citi hard were at around 3% and 2% utilization, respectively.  

The DoubleCash card provides me with a free monthly FICO score.  I've been following it closely and doing my best to keep it climbing.  Keeping utilization under 30%, all on time payments - trying to be smart about it.  My score has reflected this.  September 2015: 763, October 2015: 774: November 2015: 781 -- now heres the shock -- December 2015: 727!

I have to think this is a miscalculation or something.  My util acorss the board DROPPED as I was able to offload my expenses to the Sapphire card.  Note: spending on the Sapphire didn't start until 2016 as I was away and the card was in the mail.  Neither Freedom or Citi card went above 12-15% utilization in that time.  My total CLI jumped from $8.7k to a whopping $24.7k.  How could my score have taken such a hit!

Any info would be greatly appreciated -- thanks.

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It's actually obvious. You lose points for looking for new credit. You get at least one hard inquiry when you apply, you get a brand new account when  you get the account, and your average age of accounts goes down. It's a temporary hit, though, as time heals all wounds. But if you want your scores to keep going up, and to never go down, don't apply for anything.

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That makes sense to me.  I understood I would incurr some hit, I was just a little suprised as to how much of one it was!  I'm happy with my new Sapphire card and I guess a hit is just the name of the game.  I will apply for an amex sometime this year, will be watching closely to keep the FICO going up.  Thanks for the input.

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The hit is bigger with you because you had less history, and fewer cards, than many of us. But like I say, it's temporary, and you will rebound, possibly very quickly, due to the greater available credit and number of accounts, and reduced utlization percentage.

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I agree with everything that you said, but you don't think any of the hit had anything to do with multiple accounts reporting a balance?  I have a thick file, but when I have three cards report a balance, my FICO takes a hit. Once one of my cards reported a $32 balance due to auto payment for bottled water.  My score recovered after the next reported a $0 balance, but I still took a hit.

[Anonymous]

Wow, lots of great info here.  Thank you all for the responses.  For clarification, you all are saying it would be better for me to have >30% util on the Sapphire (most likely around 10%), 1% on the Citi, and no reported balance on the Freedom?  How can I push or pull those numbers to be even more favorable?  Would 1% on the Freedom (aka two Chase cards reporting a balance) be better than 1% on the Citi?  Would all of that be better than 1%, 1%, 10% ?  Thanks!!

[bdhu2001]

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@Anonymous wrote:

Wow, lots of great info here.  Thank you all for the responses.  For clarification, you all are saying it would be better for me to have >30% util on the Sapphire (most likely around 10%), 1% on the Citi, and no reported balance on the Freedom?  How can I push or pull those numbers to be even more favorable?  Would 1% on the Freedom (aka two Chase cards reporting a balance) be better than 1% on the Citi?  Would all of that be better than 1%, 1%, 10% ?  Thanks!!

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Best FICO based on utilization is 9% or less any individual card.  Utilization rounds up so it's not 9.3 or etc.  On all other cards, the statement should report a $0 balance. Once that occurs, check your next FICO score from your bank.  Then allow two cards to report a balance, check your FICO from your bank.  If your score went down when the second card reported, then one card reporting a balance is your sweet spot.  If it went up, then two cards are your sweet spot.

Make sure when you test that everything else remains the same (i.e no new inquiries or credit).  It's  a good time to garden, because it'll take 3 to 4 months or the purchase of a FICO subscription.

[Anonymous]

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@bdhu2001 wrote:

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@Anonymous wrote:

Wow, lots of great info here.  Thank you all for the responses.  For clarification, you all are saying it would be better for me to have >30% util on the Sapphire (most likely around 10%), 1% on the Citi, and no reported balance on the Freedom?  How can I push or pull those numbers to be even more favorable?  Would 1% on the Freedom (aka two Chase cards reporting a balance) be better than 1% on the Citi?  Would all of that be better than 1%, 1%, 10% ?  Thanks!!

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Best FICO based on utilization is 9% or less any individual card.  Utilization rounds up so it's not 9.3 or etc.  On all other cards, the statement should report a $0 balance. Once that occurs, check your next FICO score from your bank.  Then allow two cards to report a balance, check your FICO from your bank.  If your score went down when the second card reported, then one card reporting a balance is your sweet spot.  If it went up, then two cards are your sweet spot.

Make sure when you test that everything else remains the same (i.e no new inquiries or credit).  It's  a good time to garden, because it'll take 3 to 4 months or the purchase of a FICO subscription.

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Good strategy!  I'll give it a go and report back.  Thanks for the help.

[lg8302ch]

I would also assume the cut in AAoA and the number of accounts reporting a balance is the reason for the drop.  My test in 2013 where I had 8 accounts and let 8$ report on 8 accounts (1$ on each) and the next months 8$ on a single account made a difference of 45 points on Equifax.  Right now I still see a drop in score if more than 50% of my accounts report a balance even very small. You can test the impact by paying down before statement cut date and let all but 1 account report 0 balance and on 1 account less than 9%. Like this you will see the impact on your profile.  Congrats on the card

[Anonymous]

For anyone wondering, FICO back to 770.  $0 balance on the Freedom, < 1% on the Citi DoubleCash, and just paid down 3% on the CSP.  After the DoubleCash statement posts I will put 1% on the Freedom.  Thanks for the help!  

[SouthJamaica]

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@Anonymous wrote:

For anyone wondering, FICO back to 770.  $0 balance on the Freedom, < 1% on the Citi DoubleCash, and just paid down 3% on the CSP.  After the DoubleCash statement posts I will put 1% on the Freedom.  Thanks for the help!  

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Good

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous wrote:

For anyone wondering, FICO back to 770.  $0 balance on the Freedom, < 1% on the Citi DoubleCash, and just paid down 3% on the CSP.  After the DoubleCash statement posts I will put 1% on the Freedom.  Thanks for the help!  

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Good

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Agreed!  My latest question if any of you have input: AMEX Pre-qual. Should I app?

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous wrote:

For anyone wondering, FICO back to 770.  $0 balance on the Freedom, < 1% on the Citi DoubleCash, and just paid down 3% on the CSP.  After the DoubleCash statement posts I will put 1% on the Freedom.  Thanks for the help!  

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Good

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Thanks!  My latest question: AMEX Pre-qual. Should I app?

[Anonymous]

Okay now how about this.  I recieved an enticicing AMEX offer and am tempted to take it, despite only being 3mo from the CSP opening.  Here is this thread: AMEX Pre-qual. Should I app?

I was given advice to app for both the Platinum w/ 100,000 point ($3k / 3mo spend) intro bonus, AND the PRG with 50,000 ($1k / 3mo spend).  Making it $4k / 3mo spend 150,000 mile bonus.  Pretty enticing.  My original plan was to wait 6mo since CSP (June) before applying for an AMEX (PRG) but this has expidited that somewhat.  I don't want the offer to go away!

My question pertaining to this thread is: will two more open accounts plus potentially two hard pulls (hoping they merge) be a dramatic hit to my score?  It will of course affect my AAoA which we have determined above was a major reason for the ~50 point hit from CSP.  Thanks!