I was enjoying a score of 779 in FICO so I decided to open three credit cards to chase AA miles. The first one was an AmEx SPG then two cards from Citi. I used the AmEx first because of the easy requirement in order to get the reward. It wasn't until after the first Citi card reported that an alert from MyFico triggered my 750 target , I then noticed two 30-point hits from both cards reporting that brought my score to 752 then 723. I'm now concerned that when I start using the third card that it will bring the score down more. Was I wrong to think that inquiries/balance reporting would have only cost me 5-10 points for each card? What are your experiences? Thanks.
Did the added CCs report with a balance thereby increasing util?
IME, I've lost 20-25 per new CC reporting factoring out util. I've typically regained most of those points inside of 6 months with a remainder by a year.
Yes, both had reported with balances which I paid off. One thing I noticed was that they both did not have CL's. Could that have made it look like I had 100% utilization?
The effect of new inquiries and new accounts varies depending upon the file categorization ("bucket") of the consumer.
Higher FICO achievers usually dont have many new accounts, and thus their addition is viewed as more of an anomoly than when added to lower FICO scorers.
It is not uncommon for higher achievers to see score changes that are quite different from those of normal consumers in many of the FICO scoring categories.
Additionally, the impact goes beyond that of only the new credit scoring category. With higher scores, the consumer almost invariably has a relatively high average age of accounts. Adding three new TLs with zero age most likely had a proportionally higher effect on scoring of avg age of accounts.
I would suspect that might be the main culprit......
Use of the new cards is not the triggering factor. Once the credtior has established the account in their records, they can report regardless of whether the card has been "activated" and used.
If you had a low amount of total accounts reporting the hit on AAoA combined with the new inquiries might have been enough to pull you down. If you reported new balances with the new accounts that may have dragged you down as well.
I recently opened 4 new accounts and got a 30 point drop (on WM FICO) down to 676, one card is yet to report and I also let a card report 50% util on accident, my AAoA dropped from about 2.5 years to 9 months and overall util slightly above 12%. Since I didn't had any true FICO scores before the opening of my WM card I can only guess the damage that the inquiries made before reporting the accounts. I expect to recover nearly all points in 3-6 months, probably the same for you.