Red flag for account less than 12 months old. Point loss?

[Anonymous]

I have been able to separate effects from avg age and history. But I haven't had a year where I skipped applying for something so I never found out if there would be an additional gain when this flag drops off.

Wondering if this flag represents a different point loss or if it was just average age loss. Anybody know?
Thanks

Message Edited by ilovepizza on 04-08-2008 09:27 AM

[Anonymous]

I'm not entirely clear what you're asking.

But I can tell you that TU dinged my score because my amount of new credit is considered "very good" rather than "great."  My newest card is 8 months old and I have no inqs (and no apps).  So I think it all depends on the bucket you are in.

[Anonymous]

Example. If you added 2 AU accounts. To begin with you had 8 accounts 5 years avg age. Now you added 2 AU accounts today what would happen to your score?

AU Account #1 NEW opened 4 months ago. (past the 60 day -10 point drop)
AU Account #2 Opened 9 yrs, 8 mo old. (NO HISTORY / dormant) Just used to keep average age constant. This will isolate the red flag. Would this case loose points do you think?

Average age will still be 5 years for all 10 accounts.
FICO will flag "AU Account #1" because it is less than 12 months old. Would your score drop because of this flag? In this case Average Age is constant and No Inq. I am just trying to learn if this flag means anything or if it is just a warning.

Message Edited by ilovepizza on 04-08-2008 10:45 AM

[haulingthescoreup]

I would think that there would be a point drop, however small. Even though you balanced it out with another older account to maintain the average age, I still think that there's a penalty for newness.

Is this all hypothetical, or did this happen? and if so, what if anything changed on screen 2 of the FICO reports?

But since that flag is supposed to mean "Marks an aspect of your credit that is hurting your FICO® score," I'm taking this at its word.

[Anonymous]

That was hypothetical. I'm wondering how many points I am loosing for this very real flag on all 3 of my CRAs? That would be so awesome if this flag was hurting my score! Even if it is 1 point, I'll take it. I need to wait a year to find out, so this was why I was asking. I don't have any AU accounts.

[haulingthescoreup]

I hope to heaven that it's more than 1 point. I have this flag for the first time ever, with 6 new accounts showing and 2 more lurking outside the light from the campfire, and my scores took a dive of much more than 6 points!

[Anonymous]

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haulingthescoreup wrote:
I hope to heaven that it's more than 1 point. I have this flag for the first time ever, with 6 new accounts showing and 2 more lurking outside the light from the campfire, and my scores took a dive of much more than 6 points!

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But part of the dive in your scores is explained by the lowered average age and recent inquiries.

I think the effect of having a new account is not that much, perhaps 5-15 points, depending on the age of the new account and everything else in the profile.

Due to an app-spree I had in May of 2007, I have 9 new accounts, out of which 1 is only 1-month old, and another one is 3-months old, and yet my score has recovered to within 5 points of the pre-spree levels.

Of course, the current credit snapshot has the following advantages over the one fromr May 2007:

- oldest account is 10 months older now than in may of 2007,

- there are over 90 additional instances of "OK" payments (I know for a fact that the more of this check-marks you have, the higher the FICO),

- my available credit is much higher now (although in terms of percentages, the pre-app spree util was under 9%, maybe even under 5%).

I suspect that having accounts that are:

- less than 1 month old,

- less than 3 months old,

- less than 6 months old,

- less than 12 months old.

would drop the score slightly.  The shorter the time since new account, the higher the drop. 

[Anonymous]

Has anyone noticed a score bump when a new account hit 12 months?

[RobertEG]

WOW, ChumCherum!  You need to instantly check into the Sleigh Center for addiicted Card-App-Aholics!!!

ROFL!

Message Edited by RobertEG on 04-09-2008 10:26 PM

[haulingthescoreup]

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@Anonymous wrote:
Has anyone noticed a score bump when a new account hit 12 months?

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I definitely did, and it was in two parts. On the first of the month, I got around 5 points, and from the various comments, I think that was the card hitting one year (even though its true birthday was on the 22nd.) Then on the 22nd, I got another couple of points for the inq.

I'm pretty confident in how it split up because my reports kept saying that I had one inq on whichever CRA it was until the 22nd, when that comment went away.

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@Anonymous wrote:
But part of the dive in your scores is explained by the lowered average age and recent inquiries.

I think the effect of having a new account is not that much, perhaps 5-15 points, depending on the age of the new account and everything else in the profile.

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This is my current puzzle, untangling newness from re-aging!

Since my scores dropped 50-70 points for the 5 accounts that are reporting so far (2 to go!), I'm thinking that they might be the same thing, in other words, newness penalty is the same as re-aging penalty. (5 x 10 points = 50 points; 5 x 15 points = 75 points.)

And I very much agree with the mini-birthdays that you posted, and there might even be one at 18 months. I'm getting this mostly from the simulator scenarios, and also from personal observation.