topic Re: New CC Accts posting, scores dropping in Credit Cards

New CC Accts posting, scores dropping

Anonymous — Fri, 31 Oct 2014 19:11:02 GMT

My new CC accounts are slowly beginning to report to the bureaus. First my $3000 CLI to an existing CapOne, no score change (I assumed this wouldn't do anything). Barclays reported about 4 days ago, no change. Now my Chase Freedom posted today and I got a 18 point drop Experian, 16 point drop to TU. I am done applying for anything for the foreseeable future so the score in the short term doesn't matter a whole lot, but I am wondering if I will keep getting score drops each time a new account posts? I have 8 other new accounts that will be posting in the near future and about $70K of available credit. Am I going to be down in the low 600's for a while? I am a little nervous about this. Thank you for any input. Also before anyone asks, my utilization on these cards never goes above 5% then always PIF. With the new accounts all posting util% will be less than 1% then PIF.

Re: New CC Accts posting, scores dropping

lord_kinbote — Fri, 31 Oct 2014 19:29:36 GMT

@Anonymous wrote:
My new CC accounts are slowly beginning to report to the bureaus. First my $3000 CLI to an existing CapOne, no score change (I assumed this wouldn't do anything). Barclays reported about 4 days ago, no change. Now my Chase Freedom posted today and I got a 18 point drop Experian, 16 point drop to TU. I am done applying for anything for the foreseeable future so the score in the short term doesn't matter a whole lot, but I am wondering if I will keep getting score drops each time a new account posts? I have 8 other new accounts that will be posting in the near future and about $70K of available credit. Am I going to be down in the low 600's for a while? I am a little nervous about this. Thank you for any input. Also before anyone asks, my utilization on these cards never goes above 5% then always PIF. With the new accounts all posting util% will be less than 1% then PIF.

Now, I can only speak from *my* experience; I had a very thin file - I was an AU on 1 revolver and my mortgage/car loans were in a closed state but reporting. I had a couple of other closed installments (LOC) and a few closed revolvers. My AAoA was 8 years and my scores were 760ish on all three CRAs. I opened up 9 accounts in September and 1 in October - new cards listed in my sig. Additionally, I opened up 1 share secured loan. Total inq's after app spree. EQ: 4, TU: 4, EX: 5

TU: 769

EQ: 705

EX: 701

So *I* took a beating, and the scary thing is - Amex, Chase CSP and Alliant share secured loan have not hit my reports yet. MyFico score simulator says my scores will be back in the 750ish in 12 months on EQ/EX, but who knows what that is worth. On TU, I am already looking sexy. I am sure YMMV. Again, very thin file so I was hammered. I had feel asleep at the wheel and stopped using credit, so I had to do something quick before everything fell off. Maybe, just maybe.. 10 was a little too .. nah!

Re: New CC Accts posting, scores dropping

skigirl916 — Fri, 31 Oct 2014 19:54:14 GMT

@akula wrote:
@Anonymous wrote:
My new CC accounts are slowly beginning to report to the bureaus. First my $3000 CLI to an existing CapOne, no score change (I assumed this wouldn't do anything). Barclays reported about 4 days ago, no change. Now my Chase Freedom posted today and I got a 18 point drop Experian, 16 point drop to TU. I am done applying for anything for the foreseeable future so the score in the short term doesn't matter a whole lot, but I am wondering if I will keep getting score drops each time a new account posts? I have 8 other new accounts that will be posting in the near future and about $70K of available credit. Am I going to be down in the low 600's for a while? I am a little nervous about this. Thank you for any input. Also before anyone asks, my utilization on these cards never goes above 5% then always PIF. With the new accounts all posting util% will be less than 1% then PIF.
Now, I can only speak from *my* experience; I had a very thin file - I was an AU on 1 revolver and my mortgage/car loans were in a closed state but reporting. I had a couple of other closed installments (LOC) and a few closed revolvers. My AAoA was 8 years and my scores were 760ish on all three CRAs. I opened up 9 accounts in September and 1 in October - new cards listed in my sig. Additionally, I opened up 1 share secured loan. Total inq's after app spree. EQ: 4, TU: 4, EX: 5

TU: 769
EQ: 705
EX: 701

So *I* took a beating, and the scary thing is - Amex, Chase CSP and Alliant share secured loan have not hit my reports yet. MyFico score simulator says my scores will be back in the 750ish in 12 months on EQ/EX, but who knows what that is worth. On TU, I am already looking sexy. I am sure YMMV. Again, very thin file so I was hammered. I had feel asleep at the wheel and stopped using credit, so I had to do something quick before everything fell off. Maybe, just maybe.. 10 was a little too .. nah!

I had the same file, and now the same number of new accounts in the same time period. However, I was starting with scores in the high 600's.

All of the accounts are now reporting. At most, I took a 10 point temporary hit in the middle of it all, but I'm actually better off now than I was prior to my spree, by anywhere from 4 to 15 points. So, I rebounded quite fast.

Re: New CC Accts posting, scores dropping

CreditDunce — Fri, 31 Oct 2014 20:21:07 GMT

Each time your AAoA drops below a year boundary, your score will decrease. For example, if you AAoA is 5.9 years, you add one TL and you AAoA drops to 5.1 years, you will see little if any changes in your score. If you add another TL which drops your TL to 4.5 years, your credit score will be hurt. Once your AAoA is 1 year or less, the new accounts will stop hurting your immediate score. Of course, a 1 month AAoA account will take longer to get to 1 year AAoA than a 11 month AAoA..

A lower utilization may help your credit score. However, with 5% current utilization, I wouldn't count on much benefit. Your score also took a hit from all of the HP/INQs you incurred to get the new TL's. However, the HP/INQ penalty will be gone in 1 year.

Re: New CC Accts posting, scores dropping

Anonymous — Fri, 31 Oct 2014 20:28:55 GMT

@CreditDunce wrote:
Each time your AAoA drops below a year boundary, your score will decrease. For example, if you AAoA is 5.9 years, you add one TL and you AAoA drops to 5.1 years, you will see little if any changes in your score. If you add another TL which drops your TL to 4.5 years, your credit score will be hurt. Once your AAoA is 1 year or less, the new accounts will stop hurting your immediate score. Of course, a 1 month AAoA account will take longer to get to 1 year AAoA than a 11 month AAoA..

A lower utilization may help your credit score. However, with 5% current utilization, I wouldn't count on much benefit. Your score also took a hit from all of the HP/INQs you incurred to get the new TL's. However, the HP/INQ penalty will be gone in 1 year.

Yep. Uusally, getting a new account has three impacts:

1) HP to get (except for special cases like shopping cart trick, or sp approvals like NASA). This negatively impacts score for a year, decreasing in effect over the year,, but can hurt manual reviews for up to 2 years.

2) Increase overall CL. This helps only if you have "significant" outstanding balances report. If you PIF on most accounts, and leave a small portion on 1, this won't make much of a difference. But this is the factor cited by most!

3) Reduction in AAoA: Lasts until 10 years after you close the account, but whether it is significant or not depends on the thickness of the file.

So two negatives, one possible positive.

Re: New CC Accts posting, scores dropping

Anonymous — Fri, 31 Oct 2014 20:36:29 GMT

@Anonymous wrote:
@CreditDunce wrote:
Each time your AAoA drops below a year boundary, your score will decrease. For example, if you AAoA is 5.9 years, you add one TL and you AAoA drops to 5.1 years, you will see little if any changes in your score. If you add another TL which drops your TL to 4.5 years, your credit score will be hurt. Once your AAoA is 1 year or less, the new accounts will stop hurting your immediate score. Of course, a 1 month AAoA account will take longer to get to 1 year AAoA than a 11 month AAoA..

A lower utilization may help your credit score. However, with 5% current utilization, I wouldn't count on much benefit. Your score also took a hit from all of the HP/INQs you incurred to get the new TL's. However, the HP/INQ penalty will be gone in 1 year.
Yep. Uusally, getting a new account has three impacts:

1) HP to get (except for special cases like shopping cart trick, or sp approvals like NASA). This negatively impacts score for a year, decreasing in effect over the year,, but can hurt manual reviews for up to 2 years.
2) Increase overall CL. This helps only if you have "significant" outstanding balances report. If you PIF on most accounts, and leave a small portion on 1, this won't make much of a difference. But this is the factor cited by most!
3) Reduction in AAoA: Lasts until 10 years after you close the account, but whether it is significant or not depends on the thickness of the file.

So two negatives, one possible positive.

So IF you could remove the HP part. There's only one negative

Except for manual review "Why do you have 40 accounts in one year?!"

Re: New CC Accts posting, scores dropping

Anonymous — Fri, 31 Oct 2014 22:28:46 GMT

Great, I was just getting a little nervous and hoping there would be some point where the negative effects would level out (hopefully before taking me down to a 350 score... haha). I don't plan on applying for anything in the next 12 months or more so hopefully that will give my file time to get back in the mid to mid-high 700's. As always, great information everyone and thanks for the help. Hopefully I don't get down to the 600's. I will keep posting the effects each account has on myFICO scores as they come onto my reports.

Re: New CC Accts posting, scores dropping

Anonymous — Fri, 31 Oct 2014 22:45:36 GMT

Equifax just updated and added my new Chase account. Took a 35 point hit, down to 702 on EQ now... This is going to be hard to watch over the next month. 8 more accounts are going to hit, it's like watching a car crash. I actually needed to do this now though. The only thing saving my AAoA was a car loan from when I was 18-21. So it closed 9 years ago when I paid it off. So pretty soon my AAoA would be down to nothing and I would have only had one tradeline reporting so I needed to app these cards while the old auto loan was still reporting. What a mess this is going to become, haha.

Re: New CC Accts posting, scores dropping

Anonymous — Fri, 31 Oct 2014 23:20:06 GMT

In my case, I opened 2 new car loans and 5 credit cards from July - September, and I am just now seeing my scores level out. You can see in my signature what my scores were before, and now.

My util is high, but the addition of over 2x more revolving credit helped that, now at just under 50%

Beyond that, I am looking at 3, 5 & 2 inquiries on EX, EQ & TU respectively, within the last 6 months.

My average AAOA is now at 6 years, down from 8... almost 9.

As I start to pay off my util, I should start to see my scores go back up. The inquiry damage and new credit line damage should largely be gone within the next 6 months I would imagine.

Re: New CC Accts posting, scores dropping

lord_kinbote — Sat, 01 Nov 2014 12:00:00 GMT

@skigirl916 wrote:

I had the same file, and now the same number of new accounts in the same time period. However, I was starting with scores in the high 600's.

Opening 10 new accounts and only receiving a 10 point "temporary" drop are atypical results, if not unheard of. Inquiries alone should drop you well below 10, not to mention the AAoA factoring. As the OP has stated in his updated post, he is seeing "dramatic" impacts for opening that many new accounts - and as expected.

Re: New CC Accts posting, scores dropping

jamie123 — Sat, 01 Nov 2014 13:32:20 GMT

@akula wrote:
@skigirl916 wrote:
I had the same file, and now the same number of new accounts in the same time period. However, I was starting with scores in the high 600's.
All of the accounts are now reporting. At most, I took a 10 point temporary hit in the middle of it all, but I'm actually better off now than I was prior to my spree, by anywhere from 4 to 15 points. So, I rebounded quite fast.

Opening 10 new accounts and only receiving a 10 point "temporary" drop are atypical results, if not unheard of. Inquiries alone should drop you well below 10, not to mention the AAoA factoring. As the OP has stated in his updated post, he is seeing "dramatic" impacts for opening that many new accounts - and as expected.

It makes a huge difference in score drop potential depending on where your scores are before starting an app spree. If you are starting with a 760 score with a thin file and add 10 cards, I could see your score dropping into the 680 to 710 range for a few months. If you are starting with a score of 690 with a thin file and then add 10 cards, I can't see your score going below 650 for any reason.

It usually comes down to oldest account and AAoA. A person that is starting with a 690 probably doesn't have much to lose in the AAoA and doesn't have a very old card as an oldest account.

If you notice in the forums, a person that is brand new to credit and gets their first score after six months will almost always start at 650 plus or minus a couple of points. It seems to take actual baddies on your reports to drop you below 650. (Or possibly high UTI with a short history.)

Re: New CC Accts posting, scores dropping

Themanwhocan — Sat, 01 Nov 2014 14:07:29 GMT

@Anonymous wrote:
@Anonymous wrote:
@CreditDunce wrote:
Each time your AAoA drops below a year boundary, your score will decrease. For example, if you AAoA is 5.9 years, you add one TL and you AAoA drops to 5.1 years, you will see little if any changes in your score. If you add another TL which drops your TL to 4.5 years, your credit score will be hurt. Once your AAoA is 1 year or less, the new accounts will stop hurting your immediate score. Of course, a 1 month AAoA account will take longer to get to 1 year AAoA than a 11 month AAoA..

A lower utilization may help your credit score. However, with 5% current utilization, I wouldn't count on much benefit. Your score also took a hit from all of the HP/INQs you incurred to get the new TL's. However, the HP/INQ penalty will be gone in 1 year.
Yep. Uusally, getting a new account has three impacts:

1) HP to get (except for special cases like shopping cart trick, or sp approvals like NASA). This negatively impacts score for a year, decreasing in effect over the year,, but can hurt manual reviews for up to 2 years.
2) Increase overall CL. This helps only if you have "significant" outstanding balances report. If you PIF on most accounts, and leave a small portion on 1, this won't make much of a difference. But this is the factor cited by most!
3) Reduction in AAoA: Lasts until 10 years after you close the account, but whether it is significant or not depends on the thickness of the file.

So two negatives, one possible positive.
So IF you could remove the HP part. There's only one negative

Except for manual review "Why do you have 40 accounts in one year?!"

So if we remove all the negatives, that would be perfect. Wow, so Dave Ramsey was right !

OR... not.

Re: New CC Accts posting, scores dropping

Anonymous — Sat, 01 Nov 2014 14:27:29 GMT

Hoping to offset all my new accounts by adding an Amex in January. A new 1998 card should help!

Re: New CC Accts posting, scores dropping

Anonymous — Sat, 01 Nov 2014 17:02:11 GMT

@Anonymous wrote:
Hoping to offset all my new accounts by adding an Amex in January. A new 1998 card should help!

I just opened my first AMEX, it is one of the 10 accounts involved in this score roller coaster. I added it for just the reason you mentioned. In the future if I open account I can simultaneously open another AMEX line and my AAoA won't be damaged.

Re: New CC Accts posting, scores dropping

Anonymous — Sat, 01 Nov 2014 17:11:24 GMT

@jamie123 wrote:
It makes a huge difference in score drop potential depending on where your scores are before starting an app spree. If you are starting with a 760 score with a thin file and add 10 cards, I could see your score dropping into the 680 to 710 range for a few months. If you are starting with a score of 690 with a thin file and then add 10 cards, I can't see your score going below 650 for any reason.

It usually comes down to oldest account and AAoA. A person that is starting with a 690 probably doesn't have much to lose in the AAoA and doesn't have a very old card as an oldest account.

If you notice in the forums, a person that is brand new to credit and gets their first score after six months will almost always start at 650 plus or minus a couple of points. It seems to take actual baddies on your reports to drop you below 650. (Or possibly high UTI with a short history.)

I just got an alert when my Chase payment posted on my EQ report. Chase balance went to 0 and I recovered 12 points of the 35 I lost for the new account. If this continues to trend like this I don't think any of my scores will drop below 700.