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Valued Contributor
Posts: 2,181
Registered: ‎04-01-2015
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Re: Maximizing the final 25% of the pie to 850?

A spree of 3 or more new cards typically should impact score. This is almost certainly the case for 850 profiles as they would have limited inquiries under a year old and few recent account openings. However, profiles with a low AAoA (under 2 years), a handful of recent accounts but but high age of file might be minimally impacted.

 

Someone with 16 open accounts, 8 or more inquiries under a year age and 3 accounts opened 2 months ago that embarks on a 2nd spree - opening 3 additional accounts - might not see a score drop. Key points here: critical mass of recent accounts already, inquiry count at or above saturation QTY, significant AAoA threshold not crossed and established credit file.

 

 

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 804 TU 823 EX 830 (3/2017) EX Fico 98: 839 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950 (4/2017)
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Re: Maximizing the final 25% of the pie to 850?

I think I may have been a bit unclear in my last post.  I agree that a spree would impact score and prevent someone from attaining an 850 score, but I mean exactly 1 year post spree, basically regardless of the size of the spree.  1 year post spree the inquiries associated with the spree (no matter how many) would be unscoreable and the "new accounts" and AoYA would be 1 year old.  I'm assuming for the example that AAoA is 8+ years both before and after the accounts from the spree report. 

 

Basically what I'm getting at here is whether or not someone that did knock out a spree would be able to attain an 850 exactly 1 year after the spree if there was no change to AAoA.

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Re: Maximizing the final 25% of the pie to 850?

There was an article posted a few years ago where a reporter was talking to a FICO representative about people that had perfect 850 FICO scores. Now I know everybody is different, but the FICO representative told the reporter that this is what an "average" person with a perfect 850 score had on his report:

 

  • A 30 year mortgage that he had been paying on time for at least 10 years
  • A HELOC with a balance of $0
  • A closed auto loan with perfect payment history
  • An open auto loan that was almost paid off.
  • A total of 5 to 8 open credit cards with the oldest card being at least 10 years old and the youngest card being at least 2 years old

You can see by the scenario above just how much FICO values AAoA and oldest account and doesn't like "new" credit. The so called "average" account with a perfect 850 score shows that the person is pretty conservative in their use of credit but still achieves the perfect 850 score because of the age of accounts.

 

In my years of participating in the MyFICO forums I don't ever recall a person being able to add a new credit account and also maintain an 850 score. Even thick well aged accounts seem to drop to the 820-830 range for a year after adding a new account.


Starting Score: EQ 653 6/21/12
Current Score: EQ 703 8/5/17 - EX 743 8/5/17 - TU 731 8/5/17
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Re: Maximizing the final 25% of the pie to 850?


BrutalBodyShots wrote:

I think I may have been a bit unclear in my last post.  I agree that a spree would impact score and prevent someone from attaining an 850 score, but I mean exactly 1 year post spree, basically regardless of the size of the spree.  1 year post spree the inquiries associated with the spree (no matter how many) would be unscoreable and the "new accounts" and AoYA would be 1 year old.  I'm assuming for the example that AAoA is 8+ years both before and after the accounts from the spree report. 

 

Basically what I'm getting at here is whether or not someone that did knock out a spree would be able to attain an 850 exactly 1 year after the spree if there was no change to AAoA.


To answer your question in a more direct manner...

 

IMHO yes, a person with a thick file that would be able to maintain an AAoA of 8+ years after doing a 3 account spree, would be able to bounce back to a perfect 850 score or very close to it in a year. IMHO some FICO models will consider an account "new" until it is 2 years old, so it could take 2 years to get all the way back to 850.

 

It's like making a deal with the Devil. You need a thick file to maintain high scores once you get there but to get a thick file you need to add a lot of accounts along the way that keep your scores down.

 

That's what I'm doing now. In the past year I added:

 

30 year mortgage

1 auto loan

3 new credit cards

 

FICO pummeled my scores for adding the new accounts but I know that in a year or 2 it will have been all for the better. I made a conscientious decision to take a hit to my scores this year because I really don't anticipate needing a new car or mortgage for a few years from now. And really...High scores will only save you money when it comes to a mortgage or auto loan because you will get better interest rates. (My new auto loan has a 1.79% APR and my mortage has a 3.875% APR)


Starting Score: EQ 653 6/21/12
Current Score: EQ 703 8/5/17 - EX 743 8/5/17 - TU 731 8/5/17
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Re: Maximizing the final 25% of the pie to 850?

[ Edited ]

BrutalBodyShots wrote:

Again, nice insight offered above.

 

TT, question for you regarding a "spree" which I would say is similar to what IV did.  However, in his/her case an installment loan was added (presumably at > 9% utilization) and it was also stated that an AAoA threshold may have been crossed.

 

Do you think that a spree of who knows, 3-5 accounts, within a year wouldn't adversely impact score?  Certainly the inquiries would become unscoreable and AoYA would reach 1+ year (no "new" accounts for sure).  This illustration above is assuming that an AAoA threshold isn't being crossed (8+ years both pre/post spree) and AoOA is 15+ years.  Do you think that difference between AoYA being 1 year verses 2 years would keep such a person from grabbing an 850?  I suppose in this illustration the "spree" could be even larger for someone with an extremely thick file where their AAoA wouldn't drop under 8 years with the new accounts.  What are your thoughts here?


To answer your previous question, I have 850 FICO8 scores across all 3 CRA.

 

As to your post quoted above, I applied for 3 new cc (closed 2) at the end of 2015/start of 2016 then another in Aug 2016 (closed 1) and my scores dropped about 40 points.  My scores recovered in the months after the 1 year mark. This last app didn't affect my scores.  "Actively seeking credit" is still cited on my report (that parameter is currently only rated as good/very good instead of excellent). . 

 

I tend to apply in batches every 4-5 years as that's when I evaluate whether there are better cards out there. There were a lot of good cards that came out in the last couple of years. 

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Re: Maximizing the final 25% of the pie to 850?

I have 850 on EX with the following:

 

Oldest account 34 years.  Newest 1 month (Auto lease).  Average age = 10 years and 10 months

 

4 new accounts past 2 years.  2 of them during the past year.  1 is a mortgage, 1 auto lease.

 

3 inquries over 2 years.  2 of them in the past year.

 

Available credit 113,667.  Utilization 0%

 

29 accounts.  17 open.  12 closed.

 

 

Established Contributor
Posts: 545
Registered: ‎03-27-2011

Re: Maximizing the final 25% of the pie to 850?


Thomas_Thumb wrote:
  

Another poster "IV" had 850 scores a couple years back and then added three new accounts (one being a loan) which resulted in a score drop to the mid 820s in 2014. (shortcut to post below).However, IV may have crossed an AAoA threshold or opened a high B/L installment loan in the process. Of note, IV is back at 850 on two CRAs

 

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Utilization-Percentage-question/m-p/40734...

 


I happen to have just mentioned some updated data on this topic in another thread: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Perfect-850-score-question/m-p/5044532#M1...

 

Short version: two new auto loans in the last six months, EQ/EX still at 850 (with one HP each).

 

TU dropped lower, but with four HPs on file (likely de-duped to just two).

 

These are the only new accounts on the reports since 2015, but AAoA did drop to under 8 years. (7y7m in August, 7y8m today.)

 

Main changes since 2014/2015 (when opening new accounts did lock out those 850s for a while) are more closed mortgage accounts on file (four closed, one open currently reporting), the inexorable increase in CC CLs, and AoOA now being over 21 years. (And a few REALLY old accounts having fallen off.)

 

And for what it's worth, the combined B/L of those two new auto loans and the open mortage is 95% right now.

 

Apparently, an old enough, thick enough file is basically bulletproof for FICO8 purposes. (Assuming no real negatives happening, of course.)

 

The scores I actually care about aren't quite as durable - these last few months I've "only" had a mortgage mid-score in the 780s!  (Yeah, yeah... still good enough, I know. But it's closer to my "personal minimums" than I'd like - and I'm planning on another mortgage before the end of the year.)

 

EQ8:850 TU8:835 EX8:850 (MyFico) - 2017-07-19
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Re: Maximizing the final 25% of the pie to 850?

IV, outside of the couple of new accounts you've opened since 2015, what else do you chalk your 780's mid mortgage score to when comparing it to your 850 FICO 08's?

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Re: Maximizing the final 25% of the pie to 850?

This is the greatest discussion on the board at the moment. Thank you all for participating and providing such detail. 


Current Score: EQ753 TU769 EX778
Goal Score: 800's once again


Note to self: Garden. Must garden till 3rd Qtr, 2018
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Re: Maximizing the final 25% of the pie to 850?


BrutalBodyShots wrote:

IV, outside of the couple of new accounts you've opened since 2015, what else do you chalk your 780's mid mortgage score to when comparing it to your 850 FICO 08's?


Beyond the inquiries and new accounts, there's the 95% B/L on the installment loans (2x auto, 1x mortgage), and that I'm not bothering (at the moment) to optimize utilization/reporting for cards at all. (Paying in full before due date, but NOT before statement cut/reporting.)

 

As such, depending on the time of month, all or most cards are reporting balances at the same time.  Total utilization is usually staying only around 1% (mostly due to high limits...), but % of cards reporting balances is high.

EQ8:850 TU8:835 EX8:850 (MyFico) - 2017-07-19

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