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guess I will never understand fico scoring..i got a new menards card with cl of 3500..that would lower utilization but it still droopped score a few points?
It lowers your average ago of accounts, which is 15% of your fico score. Your score will go up once your new account ages. You can read up into more detail here.
@fritscher wrote:guess I will never understand fico scoring..i got a new menards card with cl of 3500..that would lower utilization but it still droopped score a few points?
There are 3 factors that can lower your score when you open a CC: The inquiry, the reduction to your AAoA and the reduction of your AoYA or more commonly referred to as the "new account" itself. It's possible that all 3 of these factors may lower your score, while it's also possible that none of them will lower your score. All of these factors have have different thresholds associated with them, that is points where they can impact score or may not impact score.
With inquiries, it may depend on how many inquiries you have already on the bureau that is pulled. Some believe that inquiries are "binned" such that 1-2 are scored the same, 3-4, etc. It's also believed that once you reach a certain amount of inquiries, say 12-14, that adding additional ones will not adversely impact score any longer. Those are 2 examples of how an inquiry may not lower your score. If neither apply, chances are you lost some points from the inquiry, which could be anywhere from 2-3 to 8-10 give or take, depending on profile.
Next, AAoA. AAoA thresholds are believed to be at whole numbers, such as 2 years, 3 years, etc. If adding the new account caused you to cross an AAoA threshold, your score would drop. This could mean for example if your AAoA was 2.2 years and dropped to 1.8 years, your previous AAoA was scored as "2" where your new AAoA is scored as "1" since FICO scoring only goes by the whole number, rounded down, not the decimal. Also, AAoA is only impacted once the new account reports/lands on your credit report. If you just got the new CC a week or two ago, the inquiry would be impacting you already, but not any change to AAoA.
Finally, AoYA. Most believe the threshold for this is the 1 year mark. If your last new account was less than a year old and your AoYA wasn't yet at a year, you may not see a score drop associated with this new account once it reports. If your AoYA was > 1 year old, the drop of AoYA to 0 from adding the new account would likely result in a score ding.
As mentioned earlier, any score drops associated with these 3 factors above will get diluted over time. Usually around 6 months or so any score drop associated with adding a new account is gone and you're at or above the score you had at the time of getting the new account.
Also, you mentioned utilization in your original post. What was your previous utilization? If you could list your total balances (combined) and your total credit limits (combined) that would be helpful. As with other factors, utilization only impacts score changes when thresholds are crossed. Also, the $3500 of additional credit will only impact your utilization once the new account reports, which if it hasn't yet isn't doing anything to help your utilization.