How long before "You have few accounts that are in good standing." goes away?

[Revelate]

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@jamie123 wrote:

To answer your original question...

FICO doesn't consider an account fully seasoned until it is 2 years old.

Lenders don't like to see you have any accounts that are less than 6 months old and will deny new credit because of it.

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Is that the magic number?  I'd always figured it was 6 months for at least initial boundary and someone who should know once stated that over many beers, but I also figured there were breakpoints beyond that potentially.  Never saw any data on it and my own report is too darned busy to really figure anything out on that.

[Anonymous]

I think you are asking how long it will take before the account positively impacts your score in a way that offsets the drop from the inquiries and older derogatory accounts. I have noticed that when you apply for a new card it takes about a month to get the card and another month before it reports. After 6 payments have been reported it usually can be expected to see your score increase to the point it was before the inquiry. It takes a year before your score increases beyond that point. Of course you need to make all your payments on time.

You should have two times the number of good accounts vs. bad. So if you have two collections you should have four accounts that are in good standing and also at least 1 year old.  Keep making those payments on time.

[Anonymous]

6 months is about right.

[jamie123]

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@Revelate wrote:

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@jamie123 wrote:

To answer your original question...

FICO doesn't consider an account fully seasoned until it is 2 years old.

Lenders don't like to see you have any accounts that are less than 6 months old and will deny new credit because of it.

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Is that the magic number?  I'd always figured it was 6 months for at least initial boundary and someone who should know once stated that over many beers, but I also figured there were breakpoints beyond that potentially.  Never saw any data on it and my own report is too darned busy to really figure anything out on that.

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Yes, I'm very confident stating that an account isn't fully seasoned until it is 2 years old. You cannot get a perfect 850 if you have an account that is less than 2 years old on your report. At close to 2 years, with an otherwise good report you are still being nicked a few points for the "new" account.

[MarineVietVet]

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@jamie123 wrote:

To answer your original question...

FICO doesn't consider an account fully seasoned until it is 2 years old.

Lenders don't like to see you have any accounts that are less than 6 months old and will deny new credit because of it.

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May I ask where you read about this 24 month rule?

I reached out to Barry Paperno, who served as consumer affairs manager, media spokesman and myFICO Forums community manager at FICO about this subject. Here is his response:

There's no 24 month rule having to do with closed and/or new accounts or even any true definition of a new account for that matter. As with all score calculations, there are various thresholds, whether dollars or months or numbers, where the number of points increases or decreases when crossed. For time triggered factors, one threshold could very well be 24 months, just at it could also be 12, 36, 48 months, etc. Not sure why 24 months has caught on in this way, but it might just be that it's a relatively manageable time period to track - and it sort of sounds logical. Other than that, you got me!

So feel free to tell them that any "24 month rule" regarding scoring is basically hogwash. That is, it may have been their experience and that of some others, but that doesn't mean there aren't more out there who see no difference whatsoever when their new account reaches 2 years, is closed before the 2-year mark, or whatever.

[BallBounces]

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@jamie123 wrote:

Lenders don't like to see you have any accounts that are less than 6 months old and will deny new credit because of it.

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Words have specific meanings.  I do not agree with this sentence as written.

[Anonymous]

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@BallBounces wrote:

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@jamie123 wrote:

Lenders don't like to see you have any accounts that are less than 6 months old and will deny new credit because of it.

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Words have specific meanings.  I do not agree with this sentence as written.

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Lenders don't like to see you have any accounts that are less than 6 months old and will may deny new credit because of it.

[BallBounces]

Really, it would be something more like, "Depending upon one's credit history, credit score, relationship, and other profile data, some lenders don't like to see excessive new accounts,  and may decline or alter their terms because of it."

Some things get posted as fact, then repeated enough that it almost seems to make it so ....

[Anonymous]

I completely agree with your comment. As a thought exercise, is there an instance where having a new account (less than 6 months) would be looked at favorably? I'm not talking about them being indifferent to it. Genuinely curious if there is an instance where that would occur?

[BallBounces]

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@Anonymous wrote:
I completely agree with your comment. As a thought exercise, is there an instance where having a new account (less than 6 months) would be looked at favorably? I'm not talking about them being indifferent to it. Genuinely curious if there is an instance where that would occur?

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Absolutely yes.

Edit to add:   By which I mean, there are instances where adding a tradeline increases ones FICO score, potentially enabling them to be approved for something they may not have otherwise been approved for.  So yes, that could occur and is an interesting thought excercise.