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New Member
Posts: 7
Registered: ‎11-04-2011
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New line of credit/Fico drop

Hi.  So I have gotten my act together (at least credit wise).  I app'd & was approved for Chase Freedom.  Also, my Fico score (via Walmart) had been going up as my utilization has gone way down.  So I log in expecting and increase of at least 4 points.....and, yikes!  The score dropped 22 points, from 720 to 698.  Can having a new line of credit report cost that many points?  (I only have 2 inquires and AAoA is almost 2 years)

Blogger
Posts: 3,347
Registered: ‎10-19-2012
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Re: New line of credit/Fico drop

What's the difference between your new AAoA and old AAoA? Did the new account report a balance? Did the new account and new hard inquiry take effect the same day?

 

By itself, a new account being reported usually doesn't cause such a sharp drop...

Member
Posts: 92
Registered: ‎04-04-2013
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Re: New line of credit/Fico drop

how many cards did you have open? what's your AAOA? but regardless relax with such a low AAOA and few accounts I would find this normal, your scores will bounce back really fast. Last churn I went from 760's to 720's (5 cards approved)  but scores bounce back really fast.

Frequent Contributor
Posts: 332
Registered: ‎04-09-2013
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Re: New line of credit/Fico drop

[ Edited ]

I think this is just how the FICO scoring algorithm works: I was recently approved to two cards, and my scores dropped like a rock. 

 

But after about three months, they recovered and showed a modest gain. 

 

It's nothing to worry about - just don't make any more applications for awhile, until your score recovers.  It wont take long.

New Member
Posts: 7
Registered: ‎11-04-2011
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Re: New line of credit/Fico drop

Yes, it did report a balance of $28.  For some reason, I can never figure out when a first statement will cut.  (It has already been paid).  I'm sorry, but I don't know the difference between a new vs. old AAoA; I just know one.

New Member
Posts: 7
Registered: ‎11-04-2011
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Re: New line of credit/Fico drop

Yeah, from what I've read, it seems that I'd take a hit in the short term, only to see the score rise long term.  I was just surprised with that drop (no other inquires and my other cards are being paid off as fast as I can w/the monthly balances going down every month, if not PIF)

Moderator Emeritus
Posts: 7,225
Registered: ‎09-16-2011
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Re: New line of credit/Fico drop

Hi welcome to MyFICO forums!!!

The effect to your score is only temporary. Expect your score to rebound in 4 to 6 months!

Congrats on the approval!

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Member
Posts: 92
Registered: ‎04-04-2013
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Re: New line of credit/Fico drop


ChiAndruw wrote:

Yes, it did report a balance of $28.  For some reason, I can never figure out when a first statement will cut.  (It has already been paid).  I'm sorry, but I don't know the difference between a new vs. old AAoA; I just know one.


doesn't matter what your AAOA WAS just what it is now.

 

Regardless if the walmart card was your only card before, this would 100% be normal.   AAOA = 15% of your score.   So 22 points is to be expected. People usually only report very low differences in scores cause they have multiple cards to support it. Usually only going down in AAOA of 1 or 2 years at most.

New Member
Posts: 7
Registered: ‎11-04-2011
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Re: New line of credit/Fico drop

Ok....thanks for the replies.  I think I kinda knew this, but sometimes it's just good to get reassurance.

Blogger
Posts: 3,347
Registered: ‎10-19-2012
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Re: New line of credit/Fico drop


ChiAndruw wrote:

Yes, it did report a balance of $28. 


There you go. Your FICO score drop was caused by the following 3 events:

 

A lowered AAoA

A higher number of accounts that show a balance

A higher percentage of accounts that show a balance

 

The latter 2 are the ones you forgot to account for :smileywink:

 

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