Understanding FICO® Scoring

[GoodCreditIsMyGoal]

Hi All,

This is my situation:  Clean report, no baddies, no lates.  Oldest credit card only 1 year 4 months, new credit cards only 3 months old.  My FICO scores WERE pretty good ranging in the 670 - 700 area across all Credit Agencies. I took some hits due to many inquiries due to the app spree.  So now I'm sitting here with a 635 FICO score with EQ and 643 TU Fico score.  Because I have no baddies what so ever, my utilization is very low.  So that only leaves me to conclude my FICO drop is due to inquiries and AAOA which is only a measly 4 months.  So this brings me to my question....How long before I recover from this? It's super fustrating to have a clean report and still be in FICO hell because of inquries and AAOA.  I am in garden mode of course, and do not plan to apply for anything any time soon, with these FICO scores I wouldn't get approved anyway! LOL! So I don't have a choice anyway!  I don't even check my Equifax and FICO alerts anymore because it's always bad news lately! LOL!  I was on huge decline 670 - 660 - 643 and down I went, so I said let me take a break from checking my scores for a while.

So anyone know how long it takes to recover from this situation? 

[RobertEG]

Some rough numbers......

Length of credit history is approx 15% of total scoring, which is approx 125 pts.  That category is comprised of oldest account an AAoA.

With low ages for both, you are most likely losing somewhere in the neighborhood of 100 pts in that category, which places you at a max possible score now of around 750.

Building length of credit points is extremely slow, so I would not expect much in the next year or so as a result only of account aging.

Current New Credit scoring is costing some points, due to the inquiries and new accts <1yr, but that is temporary.  Gone in a year after hitting your CR, so not a factor unless you plan to app for new credit within the period before they go away.

Assuming your payment history remains pristene and your util is low, the only other significant category that might be dinging is in mix of credit.  I assume, from your recent additon of new credit, that you have multiple revolving reporting, so the other factor might be the presence of an installment line of credit, but not a biggie.  Only one part of a 10% scoring category.

After the new credit smoke clears, I see no reason why you cant break 700.

Aside from the pure FICO numbers, consider what it means from a creditor's perspective.  FICO is a risk analysis, and needs a solid time base of demonstrated performance to be comfortable with its risk assessment.  Thus, the dings for short credit history.

[cassembler]

When you say, "Low Util," what kind of numbers are we talking? $200 on a $300 card is still 67%...

[RobertEG]

Under a certain percentage of its CL.... low is usually considered to be under 10% or so.

[720ismygoal]

i say about a year, because after a year those inquiries wont apply to fico anymore. Hang in there and continue to garden, trust me, it will eventually grow.

[cassembler]

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RobertEG wrote:

Under a certain percentage of its CL.... low is usually considered to be under 10% or so.

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Robert, I think our wires got crossed My question was for the original poster:

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 720ismygoal wrote:

... Because I have no baddies what so ever, my utilization is very low. ...

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720, how low is very low?

(EDIT: +1 for multi-quote)

[GoodCreditIsMyGoal]

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cassembler wrote:

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RobertEG wrote:

Under a certain percentage of its CL.... low is usually considered to be under 10% or so.

---

Robert, I think our wires got crossed My question was for the original poster:

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 720ismygoal wrote:

... Because I have no baddies what so ever, my utilization is very low. ...

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720, how low is very low?

(EDIT: +1 for multi-quote)

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Not sure if you referring to me...I'm the original poster, and my utlization is a low 5%,  Accounts reporting a zero balance expect  one account reporting a small balance.  I pay my accounts in full each month except for one and that is usually under $50.

[GoodCreditIsMyGoal]

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RobertEG wrote:

Some rough numbers......

Length of credit history is approx 15% of total scoring, which is approx 125 pts.  That category is comprised of oldest account an AAoA.

With low ages for both, you are most likely losing somewhere in the neighborhood of 100 pts in that category, which places you at a max possible score now of around 750.

Building length of credit points is extremely slow, so I would not expect much in the next year or so as a result only of account aging.

Current New Credit scoring is costing some points, due to the inquiries and new accts <1yr, but that is temporary.  Gone in a year after hitting your CR, so not a factor unless you plan to app for new credit within the period before they go away.

Assuming your payment history remains pristene and your util is low, the only other significant category that might be dinging is in mix of credit.  I assume, from your recent additon of new credit, that you have multiple revolving reporting, so the other factor might be the presence of an installment line of credit, but not a biggie.  Only one part of a 10% scoring category.

After the new credit smoke clears, I see no reason why you cant break 700.

Aside from the pure FICO numbers, consider what it means from a creditor's perspective.  FICO is a risk analysis, and needs a solid time base of demonstrated performance to be comfortable with its risk assessment.  Thus, the dings for short credit history.

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Thanks for laying that out for me RobertEG, makes a lot of sense and very helpful!

[GoodCreditIsMyGoal]

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720ismygoal wrote:

i say about a year, because after a year those inquiries wont apply to fico anymore. Hang in there and continue to garden, trust me, it will eventually grow.

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Thanks 720ismygoal.....That's what I'm gonna do, keep hanging in there and continue to keep utl low, pay on time and hopefully sooner rather than later I'll get a FICO boost.