Too many new accounts?

[Gotagoal]

Does anyone know how long before Fico scoring changes their opinion of "too many new accounts"? Currently I fall into the "bad" or "not good" categories because of opening too many new accounts in Aug 07.

As time goes by, and they age, will the scenario change to a better rating in that category? and does anyone know how long it will take, 1 yr or 2 yrs?

[Anonymous]

if you look at the scoring sim and the estimator it asks when you last opened an account. they both have options in 3 month increments that go to 24 months (if i recall correctly).

this leads me to think that you gain some age gradually, but it's not considered new at the 24 month mark.

[Anonymous]

I get the message for 12 months.

[RobertEG]

A "new" account counts initially on FICO score due to the hard inquiry credit pull that led to the new account.  Credit inquiriies stay on your CR for two years, but do not count in the scoring algorithm after one year.  They can hit for up to 10 points when first posted, but drop off entirely from scoring after one year.  So not a concern unless you need to apply for new credit in the near future. The only other disadvantage to a "new account" is that it can hurt your average age of accounts.  If you have an otherwise long credit history, this will not amount to much, but if you have a thin or short credit history, it may hit harder in the lenght of credit category.

[Anonymous]

---

RobertEG wrote:

..., but if you have a thin or short credit history, it may hit harder in the lenght of credit category.

---

"Harder" in the sense that the one new account will contribute more to the overall average age than it would for someone with many more accounts, but the FICO effect may not hit someone with a very short file very hard at all.  Very short files already have a very short average age.  A new account won't hurt that too much since the damage is already done.

[Gotagoal]

Thanks everyone for your input. Very helpful! I didn't know that the inquiries stay on for 2 years, but don't have an effect after 1 year. Or a lesser effect. That's great. Either way I know the rule is to not apply for new credit unless you need it. I'm set so I'll just pay my bills and chill for a while

[Anonymous]

---

Gotagoal wrote:
I didn't know that the inquiries stay on for 2 years, but don't have an effect after 1 year. Or a lesser effect.

---

The first way you said it is correct.  They have NO effect after one year.