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When is an account no longer considered "new"?

Senior Contributor

Re: When is an account no longer considered "new"?

You never know.  Before these 3 accounts it had been 1 year and 3 months since I last opened 2 accounts, then 3 years prior I opened 2 accounts.  Total accounts sit at 22, 8 of which are open, 14 closed to provide some more data on the subject.

Message 11 of 44
Community Leader
Senior Contributor

Re: When is an account no longer considered "new"?

This may explain it then.  If FICO defines "new" as less than 24 months, then you have exactly 5 new accounts out of 22.  That's less than 25%. 

 

If that is what that "reason" is getting at then that would be far less crazy.   (If FICO defines new as less than 12 months, then you have less than 15% of your accounts being new.)

 

I will say that the Vantage 3 reason codes are in general far less ambiguous and nutty.

Message 12 of 44
Senior Contributor

Re: When is an account no longer considered "new"?


CreditGuyInDixie wrote:

This may explain it then.  If FICO defines "new" as less than 24 months, then you have exactly 5 new accounts out of 22.  That's less than 25%. 

 

If that is what that "reason" is getting at then that would be far less crazy.   (If FICO defines new as less than 12 months, then you have less than 15% of your accounts being new.)

 

I will say that the Vantage 3 reason codes are in general far less ambiguous and nutty.


That makes sense.  What doesn't really make sense though is that only TU provided me with that reason code.  It's not just this reason code.  In the past it's often been a head scratcher as to why one bureau will contain reason code(s) that the others don't.  Of course there are also examples of contradicting reason codes, or ones that both say they are helping your score with one bureau yet hurting you on another bureau.  I guess the moral of the story is not to put too much thought into reason codes in general!  It seems more often than not they raise more questions rather than provide answers.

Message 13 of 44
Frequent Contributor

Re: When is an account no longer considered "new"?

Good...friggin...information  here guys. This is awesome. Although I get smacked around on here for it all the time, I have ALWAYS believed that the reason codes are bull... or at the very least ambiguous/inconsistent enough not to be taken absolutely. 

FICO 8:  EQ:687  TU:728  EX:735
Message 14 of 44
Senior Contributor

Re: When is an account no longer considered "new"?

No doubt about it.

 

I'll give you a perfect example.  Yesterday when I pulled my scores, under "What's hurting your score?" I had the reason code "Few current accounts" which on the next line is defined as "Number of your accounts currently being paid as agreed.  8 accounts."

 

Currently I have 8 open accounts on my reports, and all 8 have flawless payment history.  The only 2 accounts that I have with late payments are closed... so they aren't "current" accounts.  Which means, the definition of their reason codes doesn't match the actual codes as it is obviously including past (closed) accounts into this.  But, if that's the case, why wouldn't I have received this reason code sooner since those lates have been on those closed accounts for years? 

 

To further punctuate how bogus this reason code is... 5 months ago I opened 3 of these accounts, so 5 months ago I had 5 current accounts.  I find it amusing that with only 5 current accounts I didn't receive this reason code, yet now 5 months later with 8 current accounts I get the reason code.  Just another example of how reason codes don't make sense!

 

 

Message 15 of 44
Frequent Contributor

Re: When is an account no longer considered "new"?

A natural assumption would be that you've got accounts that are not being paid as agreed. Ridiculous. How is that at all logical?  Furthermore, how are scores above 750 being "hurt" by anything? All of this needs to be taken with a HUGE grain of salt.

FICO 8:  EQ:687  TU:728  EX:735
Message 16 of 44
Established Contributor

Re: When is an account no longer considered "new"?

This is all very good information, thanks everyone!

Goal: 700's by 11/1/2015 (all baddies will be gone)



Message 17 of 44
Valued Contributor

Re: When is an account no longer considered "new"?


CreditGuyInDixie wrote:

 

Because the details of how FICO implements this factor are unknown (as I just mentioned) and because the timing of an account turning 1 year old often coincides with inquiries turning one year old, it's very difficult to analyze "data points" in a meaningful way here.


 

I have passed the one year mark for new credit on my one recent account, followed a couple of days later by my three FICO 08 scores all increasing nicely, whereas little happened a month earlier when the inquiry dropped off. This is opposite of what happens to FICO 04 which keeps the inquiry in full force until the last day, unlike the impact of new credit which gradually tapers off.

It can be added that I pay no attention on how the myFICO report rates my score ingredients which are not coming directly from the FICO algorithm, e.g. listing my amount of new credit as very good rather than exceptional when my score is 850. I would much rather have the reason codes listed.

 

Message 18 of 44
Established Contributor

Re: When is an account no longer considered "new"?

I don't generally pay any attention to reason codes. In spite of my indifference, I consider it to be unbelievably silly that  myFICO doesn't provide reason codes for FICO scores over 800. The codes are being generated by FICO. There is no reason to not report them.

 

On September 1st my youngest account aged to 1 year and my TU FICO jumped to 850. I just reviewed my historical Discover TU FICO scores. For the  6 months prior to September, the only reason code I received from Discover was "TIME SINCE MOST RECENT ACCOUNT OPENING IS TOO SHORT." The reason code was, of course, generated by FICO. The reason code is now gone.

 

When I reached 850 on September 1st, I had 3 inquiries in the last year. The inquiries didn't prevent the 850 score. So, the reason code seems to have been correct. The only thing preventing the TU 850 score was the youngest account.

 

Youngest account aging to 1 year seems to be a significant rebucketing event for FICO 8 and 9. Youngest account aging to 6 months is a rebucketing event for FICO 04. However, I suspect that there is probably a minor scoring benefit to youngest account reaching 2 years for all scoring models. There seem to be virtually no data points on any forum for youngest accounts reaching 2 years.

Message 19 of 44
Established Contributor

Re: When is an account no longer considered "new"?


my-own-fico wrote:

 

I have passed the one year mark for new credit on my one recent account, followed a couple of days later by my three FICO 08 scores all increasing nicely,  


 I had a similar experience. If you don't mind my asking, how much did your FICO 8 scores increase? How many inqquiries did you have in the last year?

Message 20 of 44