Question about a new account effecting my FICO

[Anonymous]

Hello,

I'm 22 years old.  I had 2 credit cards, I had one with a credit union I had since I was 18.  Still open.. 

I had one with Bank of America, it was a $500 NFL Rewards Card, I've had it since I was 19..   I switched to an AMEX, and got a new $1,500 card(mostly for the 1.25% CB), but I choose to close the NFL Rewards Card and just use the AMEX instead.

My FICO score 2 months ago was "768" - BEFORE i switched cards.  All three bureaus basically were around 760.  How much of a hit will I take for closing the NFL Rewards card, and opening up a new line of credit?

I don't want to pull all of my scores again, and take an _additional_ hit on my credit.

Sorry if this is in the wrong section.  I figured this was the best place for it.

[llecs]

You've posted in the right spot.

FICO doesn't like to see new credit. I've lost an average of 20-25 points per new account. Most of these points will return within 6 months and the remainder will return within a year.

In the future, you'd want to leave the NFL card open, unless there's a reason why you had closed it like annual fees, charges, etc. Leaving it open helps with the mix of credit, utilization, and your avg. age (vs. being deleted in 10 yrs).

[Junejer]

The good news is, that your credit history isn't too old right now. You may take a hit, but I would not expect the hit for the AAoA to be too great.

[haulingthescoreup]

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pgrep wrote:

I don't want to pull all of my scores again, and take an _additional_ hit on my credit.

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Hi, welcome to the forums!

There is no hit to your credit when you pull your own scores. These are a form of "soft" inquiry, and they aren't counted for scoring, and they don't show when your creditors check your credit reports.

And congrats on the nice restrained use of credit. It shows in your great scores at such a relatively young age.

[RobertEG]

With cards at 4 and 3 years, you had an AAoA of 3.5 years before opening the AMEX.  Opening the AMEX dropped this to 7/3, or 2.3 years.  Not highly significant, since your credit history was short. 

Your hit may not be a big hit at all.  Even though the BOA was closed, it still counts in your AAoA calcualtion.  What you lost was its $500 CL.  But you replaced it with a CL of $1500, so you did not hurt your total CL, and thus %util.

It is still unfortunate that you closed the BOA account. 

That did not help you..  FICO puts consumers into various scoring categories, generally referred to on this forum as "buckets."  A major bucket consdieration is whether your credit file is what as referred to as a thick or thin file.  Files with less than three active trade lines (accounts) are thin files, which places you in a harsher scoring algorithm under FICO scoring.

If I were you, I would call BoA and ask them to reinstate the closed account, with the transfer of your priior account data over the new account.  They will probably do this if the account was closed in good standing. That will put you closer to a thick account status, and reinstate its CL in your &util calculation.

They may do a hard pull inquiry before reinstating the account, but unless you are planning to app for new credit within the next 12 months, then it will fall away at 12 months, and thus be of no real consequence.

Message Edited by RobertEG on 02-25-2009 10:03 PM