03-05-2013 07:52 AM
Quick question for credit card utilization.
Started working on my wifes credit. She is currently an authorized user on one of my smaller credit cards of $300 limit, which has a utlization of about 65% for a few months. Her AAoA is about 2 yrs. She is Fairly new to credit and recently was approved for a new credit line with Jared for $1500. We don't plan to use the account but have it simply for utilization (I also added myself as an auth user to this acct for my credit). When this new account shows up on her credit reports im curious to know how it will effect her score based on a new utilization of roughly 12% or being as her accounts are so new, Im wondering if the effects will not be as much as anticipated... any thoughts, appreciated.. thx
There's a lot of things happening at once...
Her FICO will be dinged due to the new account and possible change in AAoA (not enough info to calc AAoA, but it really doesn't matter anyway). However, that ding might be offset with the new TL due to utilization and/or changed in her mix of credit. If this will be her 2nd CC reporting, then know that util isn't as big as if she had 3+ CC, however, on util alone going from 65% to 12% might result in enough of a gain to offset that new ding and then some. On util alone, I think she'll see a net gain when it first reports. Then there's also a potential for an improvment to mix. If she only had one CC before, then her mix improves and that will result in an additional gain, especially since this will probably be reported as a store charge. I wouldn't be surprised if she saw a gain of 30+ on the EQ FICO in here, and maybe a hair less on TU.