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Hello everyone..I just got a new auto loan and 2 credit card approvals and waiting on a decision for a third one. My AAOA was around 4 years. One of the CCs just reported and I lost 9 points from it. Still waiting on the other one to report and the auto loan. My question is...Will the impact be about the same when each one reports ?
This is my second ever app spree. The first time when they hit my reports it jump started my scores because I didn't have no revolving trade lines at the time. 3 years later on another mini app spree and the results are the opposite this time.
The second question I have is how long will it take for my scores to recover from the new accounts ? I plan on gardening again once I get everything lined out.
Not nearly enough information...
The additional new credit cards are each likely to have a lesser effect (ie 9 points for first new account, 5 for second, etc)
Will all of this new cresit significantly reduce your utilization? That utility benefit can sometimes completely offset the inq and new account dings.
If the auto loan is your only installment then it may well have a net positive effect on your score.
The AAoA hit is most likely to do the greatest "medium to long term" damage. What will your new AAoA be once all new acounts hit?
The "new card penalty" can last anywhere from 3 to 6 months. But it's typically difficult to gauge given the volatility of most people's reports over that ime frame.
Thanks for the reply...That helps me out. I think some of the impact will be offset because the balances will lower my utilization.
Total CL: $321.7k | UTL: 2% | AAoA: 7.0yrs | Baddies: 0 | Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping |
@workingprogress wrote:Will the impact be about the same when each one reports ?
Not necessarily. It's not simply a matter of 1 new account = X points. It's all about the impact to your AAoA and how that factors in with the rest of your credit profile.
AAoA is just average. You can do the math to see the impact to AAoA yourself. If you don't want to manually calculate use a spreadsheet and its date calculation functions or an onine AAoA calculator.
It's not just AAoA that matters. Having new accounts can have a negative impact. Impact, as with any factor, depends on credit profile. Generally speaking, a person with thicker, stronger profile will see less of an impact than one with a thinner profile and/or profile with issues.
@workingprogress wrote:
The second question I have is how long will it take for my scores to recover from the new accounts ?
It's not just a matter of time. You can do the math to determine when your AAoA will recover. IIRC new accounts are considered new until ~2 years old. However, again, these are not the only factors that matter for scoring.
http://www.myfico.com/crediteducation/whatsinyourscore.aspx
Don't just garden and spree and rely on time. Understand how credit is assessed and scored. Apply for products that suit you when your credit is in shape.
@workingprogress wrote:Hello everyone..I just got a new auto loan and 2 credit card approvals and waiting on a decision for a third one. My AAOA was around 4 years. One of the CCs just reported and I lost 9 points from it. Still waiting on the other one to report and the auto loan. My question is...Will the impact be about the same when each one reports ?
This is my second ever app spree. The first time when they hit my reports it jump started my scores because I didn't have no revolving trade lines at the time. 3 years later on another mini app spree and the results are the opposite this time.
The second question I have is how long will it take for my scores to recover from the new accounts ? I plan on gardening again once I get everything lined out.
No one can answer those questions, but I can tell you:
1. assuming the auto loan is your only installment loan, it will initially take your score down, but the faster you pay it down the faster you will pick up points, and by the time you've paid it down to around 9% you'll be ahead of the game
2. to optimize your credit card utilization you should try to have all cards but one report at zero, with one card reporting at 9% or less