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New Member
mydogsrock
Posts: 10
Registered: ‎09-07-2011

How much will new accounts impact score & for how long?

I've recenly joined this forum.  My credit history is in this post from last night:  http://ficoforums.myfico.com/t5/Credit-Cards/Establishing-my-own-credit-history-finally/td-p/1026686

 

I will have a total of 6 new credit cards with credit history year of 2011, but  the AmEx was backdated to 1989, but the rest of them will be 2011.  Only AmEx and Wells Fargo started reporting, and my EQ Fico score is currently at 780 and EX and TU Fako scores at at 790.  I'm assuming they will drop once other cards start reporting and dilute AAoA. On average, how long will new accounts impact the score and how much?

 

 

 

 

 

 

 

 

 

 

Valued Contributor
ptr2593
Posts: 1,486
Registered: ‎08-14-2011

Re: How much will new accounts impact score & for how long?


mydogsrock wrote:

I've recenly joined this forum.  My credit history is in this post from last night:  http://ficoforums.myfico.com/t5/Credit-Cards/Establishing-my-own-credit-history-finally/td-p/1026686

 

I will have a total of 6 new credit cards with credit history year of 2011, but  the AmEx was backdated to 1989, but the rest of them will be 2011.  Only AmEx and Wells Fargo started reporting, and my EQ Fico score is currently at 780 and EX and TU Fako scores at at 790.  I'm assuming they will drop once other cards start reporting and dilute AAoA. On average, how long will new accounts impact the score and how much?

 

 

 

 


 

New accounts will always impact your score because they are always the ones hurting your AAoA.  I'm not sure what you're trying to ask there.  No one can really quantify how much new accounts will hurt your score because, as you'd expect, everyone has a different history and different results. 

 

Judging from your other post, it looks like you have 1 account dating 1989 and 5 accounts dating Aug or Sept 2011.  Without actually doing any math, it's obvious that your AAoA is going to take a huge hit because you have five 1-2 month old accounts and one 264 month old account (assuming Sept 1989).  The math comes out to a new AAoA of about 45 months rather than 264 months prior to opening your 5 new accounts.

 

However, your 5 new accounts have helped your utilization ratio, so even though your AAoA will have a negative impact on your score, your util will help (assuming your 5 cards didn't all have small "toy" CLs).

 

Also, the inquiries will hurt your score for now but I believe they fall off every 12 months.

 

 

 

In My Wallet:
AMEX BCE, Citi Forward, Chase Freedom

In My Sockdrawer:
AMEX Clear, Citi Platinum Select, US Bank Platinum, J.Crew
New Member
mydogsrock
Posts: 10
Registered: ‎09-07-2011

Re: How much will new accounts impact score & for how long?

[ Edited ]

Does AAoA include AU accounts as well?  I have 4 AmEx cards dating back to 1989 and several accounts that date between 2000 and 2006, all as AU.  Except for AmEx Accolades, all my new cards have $10k - $20k CL.  I haven't activated a Chase card that has $6k CL.

Moderator Emeritus
MarineVietVet
Posts: 14,084
Registered: ‎07-14-2009

Re: How much will new accounts impact score & for how long?


mydogsrock wrote:

Does AAoA include AU accounts as well?  I have 4 AmEx cards dating back to 1989 and several accounts that dates between 2000 and 2006, all as AU.  Except for AmEx Accolades, all my new cards have .$10k CL.  I haven't activated a Chase card that has $6k CL.


Yes it does. Your AAoA is the sum of the ages of every account (except CA collections and public records) on your report, whether open or closed, calculated in months, divided by the number of accounts and then divided by 12. I use the division by 12 to make it easier to convert into years. This is measured from the time each account was opened until present.

You’ll need to figure the age of each account, open or closed, on each report. If all three reports are identical (very unlikely), you're in luck; otherwise, you'll need to run this for each report.

 

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".




Valued Contributor
ptr2593
Posts: 1,486
Registered: ‎08-14-2011

Re: How much will new accounts impact score & for how long?


mydogsrock wrote:

Does AAoA include AU accounts as well?  I have 4 AmEx cards dating back to 1989 and several accounts that dates between 2000 and 2006, all as AU.  Except for AmEx Accolades, all my new cards have .$10k CL.  I haven't activated a Chase card that has $6k CL.



Yup, AU counts in your AAoA.  Looks like you have really nice CLs!  Definitely going to help your utilization ration.

 

I'm sure you already know how to calculate AAoA, but if you don't here's a quick formula.

 

(Age of all accounts combined, in months) divided by (total number of accounts) divided by 12.  The last part -- division by 12 -- converts AAoA from months to years.

 

Also, the Chase card account is already open regardless of if you activate your card (although they may close the account if you never activate the card) so your AAoA and Util will be reported soon.

In My Wallet:
AMEX BCE, Citi Forward, Chase Freedom

In My Sockdrawer:
AMEX Clear, Citi Platinum Select, US Bank Platinum, J.Crew
New Member
mydogsrock
Posts: 10
Registered: ‎09-07-2011

Re: How much will new accounts impact score & for how long?

[ Edited ]

ptr2593 wrote:

mydogsrock wrote:

Does AAoA include AU accounts as well?  I have 4 AmEx cards dating back to 1989 and several accounts that dates between 2000 and 2006, all as AU.  Except for AmEx Accolades, all my new cards have .$10k CL.  I haven't activated a Chase card that has $6k CL.



Yup, AU counts in your AAoA.  Looks like you have really nice CLs!  Definitely going to help your utilization ration.

 

I'm sure you already know how to calculate AAoA, but if you don't here's a quick formula.

 

(Age of all accounts combined, in months) divided by (total number of accounts) divided by 12.  The last part -- division by 12 -- converts AAoA from months to years.

 

Also, the Chase card account is already open regardless of if you activate your card (although they may close the account if you never activate the card) so your AAoA and Util will be reported soon.


Thank you for the info.  I just did my calculation, and my AAoA om each CRA is currently about 14 years but will be cut down to 10-11 years once 4 more new accounts start reporting.  Fortunately, my total available credit line just from credt cards is about $300k and utilization is about 1%.

 

BTW, I received an interesting info from the Chase CSR when I called to activate my a Chase card.  I asked about PC to a BA Chase card but was told I had to wait a full year before requesting PC.  The CSR suggested I reject the card and he will send a letter stating to the fact that I reject the credit card.  The account will not be reported a CRA, and if it did they will delete the account, which will take up to 2 months.  He said to make sure to keep the letter in case the account isn't deleted from the report and send it in to dispute the account. 

 

Above method would have deleted the hard pull as well according to the CSR but I don't think that's going to happen since I applied and got a JP Morgan Select Visa card at the same time.  It will be a + if the inquiry is also deleted but I won't mind too much if it isn't.

 

Valued Contributor
debtisgood
Posts: 1,126
Registered: ‎03-25-2008

Re: How much will new accounts impact score & for how long?

An AAoA of 10-11 is still excellent and I doubt that will drastically reduce your score. I do think the inquiries and 5 new account flags will ding your score significantly. I am thinking potentially 40 points (down to 750ish FICO). That said I expect half of that to come back in 6 months and 80% to return after a year. I could be way wrong but that is my WAG.

Valued Contributor
ptr2593
Posts: 1,486
Registered: ‎08-14-2011

Re: How much will new accounts impact score & for how long?


debtisgood wrote:

An AAoA of 10-11 is still excellent and I doubt that will drastically reduce your score. I do think the inquiries and 5 new account flags will ding your score significantly. I am thinking potentially 40 points (down to 750ish FICO). That said I expect half of that to come back in 6 months and 80% to return after a year. I could be way wrong but that is my WAG.



I'm in agreement with debtisgood.  Your AAoA is excellent (and will be even after those new accounts are calculated in).  Your %utility will go down simply because you've added the CL from those 4 new accounts.  The inquiries probably won't hurt you much since 4 isn't too bad and once they fall off you'll be in great shape again.

In My Wallet:
AMEX BCE, Citi Forward, Chase Freedom

In My Sockdrawer:
AMEX Clear, Citi Platinum Select, US Bank Platinum, J.Crew

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