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Member
Tony4x4
Posts: 9
Registered: ‎11-15-2007
0

New Credit Card -17

Hi there,
 
As a new resident to the USA and wanting to start creating a higher FICO score I applied for a credit card. My score dropped by 17 points and reading the explanation I understand why, even though I don't need the credit, the assumption is made that if you apply for a credit card you must be in financial trouble and you need more credit. However if you have no credit you can't increase your credit score (go figure!).
 
Anyway my question is, how log will it take to regain the 17 points lost by getting a new credit card, by keeping it in good standing?
 
Many thanks for input.
 
Regards
 
Tony
Moderator Emeritus
cheddar
Posts: 6,794
Registered: ‎09-29-2007
0

Re: New Credit Card -17

The effects of a new account can be felt for one year, but the sting lessens after 6 months.
----------------------------
App free since 7/11/08.
TU 744 / EX 710 / EQ 694 (Starting to slip. :smileysurprised: )
Moderator Emeritus
Timothy
Posts: 9,252
Registered: ‎03-19-2007
0

Re: New Credit Card -17

You the card and other cards responsibly- keep low UTL and it will recover very quickly-

I always thought there was a 6 to 12 month rule- this really is not the case - MOST of the 10% for new credit is Inquires,



cheddar wrote:
The effects of a new account can be felt for one year, but the sting lessens after 6 months.



Member
Tony4x4
Posts: 9
Registered: ‎11-15-2007
0

Re: New Credit Card -17

Thanks. What does UTL stand for?
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Community Leader
Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
0

Re: New Credit Card -17

util = utilization = balance owed / credit limit

Find out when your card reports to the CRA's (credit reporting agencies) and pay it down (or charge it up) to allow less than 5% util to be reported for maximum score zing. So on a $1000 CL card, allow less than $50 to report. Then pay it off (to avoid finance charges) and start again.

You can run it up as high as you need, as long as you pay it down before it reports. This is the "FICO scoring game" you'll read about elsewhere. You don't want to fool with it forever, but it's great for quick score jumps.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Frequent Contributor
TheCynicalOne
Posts: 741
Registered: ‎11-05-2007
0

Re: New Credit Card -17



haulingthescoreup wrote:
util = utilization = balance owed / credit limit

Find out when your card reports to the CRA's (credit reporting agencies) and pay it down (or charge it up) to allow less than 5% util to be reported for maximum score zing. So on a $1000 CL card, allow less than $50 to report. Then pay it off (to avoid finance charges) and start again.

You can run it up as high as you need, as long as you pay it down before it reports. This is the "FICO scoring game" you'll read about elsewhere. You don't want to fool with it forever, but it's great for quick score jumps.


Ditto...except for the evil companies that report the high balances no matter what you do.  Doesn't even have to be a "no pre-set limit" card.  Will report highest balance in billing cycle.  Beware the companies that do this.
Time is credit's best friend...it can heal any wound.
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Community Leader
Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
0

Re: New Credit Card -17


TheCynicalOne wrote:
Ditto...except for the evil companies that report the high balances no matter what you do. Doesn't even have to be a "no pre-set limit" card. Will report highest balance in billing cycle. Beware the companies that do this.


That's true, and they are the companies that new CC holders frequently get stuck with.

OP (Tony), which card did you get? (if you don't mind telling.) One of our moderators, Brammy, had a card that started doing this, and she went ballistic. It was one of her HSBC cards, but her other HSBC's didn't do this. She's fun (but sort of scary) to read when she gets mad. Here's her post:

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=13890
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Member
Tony4x4
Posts: 9
Registered: ‎11-15-2007
0

Re: New Credit Card -17

Hi there,
 
I actually go 2 cards, a CaptialOne "pre-approved" postal offer and a Chase Amazon card. Only one has appeared on my credit report, so I will probably go down another 17 points, but at least I am now in the system and I have something to work with.
 
On a different note, which is also frustrating, but there again I am learning the USA credit system. I come from South Africa where credit cards are a good tool to have credit balances, they pay better interest than savings accounts. I wanted to make a large purchase which was more that my $500 credit limit, so I paid some money into the account, which was electronically done and has obviously cleared my bank, but CapitalOne "in the interest of my safety" have put a 6 day hold on the money because the payment was more than the balance due and more than my credit limit. Makes you think!
Nothing to do with credit scores but I thought it might benefit someone.
 
I was looking at the TransUnion website and they offer a product at $14.00 per month that will give you access and monitoring of all 3 credit score and reports. Sound like a better deal than what MyFico offers. Any suggestions or advise?
 
Thanks again for all your advise and comments.
 
Regards
 
Tony
Moderator Emerita
Community Leader
Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
0

Re: New Credit Card -17

I think you'll be all right with those two cards, at least in terms of them reporting the expected amounts at the expected times.

I use the TransUnion product (TrueCredit), and I like it, but strictly for the reports, not for the scores. Their scores are "FAKO's", which look a lot like FICO's, but aren't used by very many lenders. The cheery advice they give can even hurt your FICO scores, such as telling you to close cards when you have too many (however that's defined.)

Unfortunately, FICO has to pay the credit bureaus every time a score is pulled, so no one has an affordable FICO score + report monitoring system. The closest that FICO comes is ScoreWatch, which tracks your EQ reports. Even then, the package only includes two score pulls, and you pay for any others. There is a score alert service that is supposed to tell you if anything exciting is happening with your scores, but erratic is the kindest word for it, I'm afraid. EQ itself has a great deal called Equifax Credit Gold, which has daily pulls (if desired) of your real (= full) EQ report for $8.95 month. But that's only your EQ report.

At the moment, I do nearly-daily TC pulls, occasional EQ pulls, and pay for FICO scores when I just can't stand it any more. I'm trying to get better...

PrivacyMatters seems to be the hot new thing:

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=48854
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Member
Tony4x4
Posts: 9
Registered: ‎11-15-2007
0

Re: New Credit Card -17 - UPDATE

Well, now I am totally confused, but not complaining! I got my Score Watch email today which had a 17 in the subject. When I read the email it told me that another account was added to my report. So here I am thinking that my score has dropped another 17 points with the addition of the 2nd credit card, but low and behold my score had increased by 17 points :-).
 
So I just want to encourage those out there that are in the same boat as me.
 
Thanks again for all your input.
 
Regards
 
Tony

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