topic Re: Too many new cards in Understanding FICO® Scoring

Too many new cards

Anonymous — Mon, 19 Nov 2018 02:39:16 GMT

This summer I applied for 5 cards and 1 charge card and all of them got approved. My credit score at the time was 700 and now down to 655. I think a made a mistake... the reason I applied was to get a strong credit score. I thought...

Before applied, I had the below accounts:

Wife 2 cards on Amex for 18 years (I removed this due to high balances)
School loan $16,000
Capital one $1200

I haven’t put any debt on the cards and all of them are displaying at zero balance. When will my credit score jump back up to the 700 range again?

My Experian file is now displaying as

1. A short credit history
2. Heavy use of credit
3. Non mortgage installment is high

Re: Too many new cards

PointsBonus — Mon, 19 Nov 2018 02:48:25 GMT

following, same boat

Re: Too many new cards

ChargedUp — Mon, 19 Nov 2018 02:49:20 GMT

@Anonymous wrote:
This summer I applied for 5 cards and 1 charge card and all of them got approved. My credit score at the time was 700 and now down to 655. I think a made a mistake... the reason I applied was to get a strong credit score. I thought...

Before applied, I had the below accounts:

Wife 2 cards on Amex for 18 years (I removed this due to high balances)
School loan $16,000
Capital one $1200

I haven’t put any debt on the cards and all of them are displaying at zero balance. When will my credit score jump back up to the 700 range again?

My Experian file is now displaying as

1. A short credit history
2. Heavy use of credit
3. Non mortgage installment is high

Looks like you tanked your average age of accounts and took on a few hard pulls. From my own experience, I'd say when your AAoA gets back to around 2 years and a few hp's fall off. What cards did you get?

Re: Too many new cards

Brian_Earl_Spilner — Mon, 19 Nov 2018 02:57:49 GMT

Well, you got rid of the AU card which deleted that history and age from your report. The points from your inquiries won't come back for a year and you won't see a significant boost from your new accounts until they age to 1 year. And your installment loans wont start having a positive effect until the balnce ia under 28.9%. Really, the only times you'll get a boost from new credit is

A) you don't have at least 3 revolving lines and 1 installment

B) your utilization is high and the new credit limits bring the ratio down

Re: Too many new cards

Anonymous — Mon, 19 Nov 2018 03:05:08 GMT

As stated above, it's your removal of AU on a card that has been alive for 18 years, that's one of the reason since AAoA dropped compared to the new accounts. IF you had not removed the 18 year account, that would have have saved your score.

Re: Too many new cards

ChargedUp — Mon, 19 Nov 2018 03:09:12 GMT

@Anonymous wrote:
As stated above, it's your removal of AU on a card that has been alive for 18 years, that's one of the reason since AAoA dropped compared to the new accounts. IF you had not removed the 18 year account, that would have have saved your score.

Keep in mind also the OP states that card is carrying a high balance. It may do more harm than good, especially if it's reporting >85% balance to CL.

Re: Too many new cards

Brian_Earl_Spilner — Mon, 19 Nov 2018 03:16:55 GMT

@ChargedUp wrote:
@Anonymous wrote:
As stated above, it's your removal of AU on a card that has been alive for 18 years, that's one of the reason since AAoA dropped compared to the new accounts. IF you had not removed the 18 year account, that would have have saved your score.
Keep in mind also the OP states that card is carrying a high balance. It may do more harm than good, especially if it's reporting >85% balance to CL.

While a high utilization may knock a score up to 70 points, you can't beat a 20 year age of credit. Utilization can be fixed in a month or two. It'll take him years to get that age again.

Re: Too many new cards

ChargedUp — Mon, 19 Nov 2018 04:11:19 GMT

@Brian_Earl_Spilner wrote:
@ChargedUp wrote:
@Anonymous wrote:
As stated above, it's your removal of AU on a card that has been alive for 18 years, that's one of the reason since AAoA dropped compared to the new accounts. IF you had not removed the 18 year account, that would have have saved your score.
Keep in mind also the OP states that card is carrying a high balance. It may do more harm than good, especially if it's reporting >85% balance to CL.
While a high utilization may knock a score up to 70 points, you can't beat a 20 year age of credit. Utilization can be fixed in a month or two. It'll take him years to get that age again.

Not necessarily. Once the wifes cards are paid down, I don't see why the OP couldn't be added back onto her cards. As utilization is weighed heavier than AAoA, I would definitely wait for the balances to be <30% of credit line before adding back to them.

Re: Too many new cards

Anonymous — Mon, 19 Nov 2018 04:18:37 GMT

OP here.
If I re-add my wife Amex card again. Will that help?

I do have other accounts and installments paid in full.

I think I caused more harm now.

Re: Too many new cards

Anonymous — Mon, 19 Nov 2018 04:15:03 GMT

If all of your revolving balances are at 0 like you say, then you are taking a penalty.

Re: Too many new cards

Brian_Earl_Spilner — Mon, 19 Nov 2018 04:29:04 GMT

@ChargedUp wrote:
@Brian_Earl_Spilner wrote:
@ChargedUp wrote:
@Anonymous wrote:
As stated above, it's your removal of AU on a card that has been alive for 18 years, that's one of the reason since AAoA dropped compared to the new accounts. IF you had not removed the 18 year account, that would have have saved your score.
Keep in mind also the OP states that card is carrying a high balance. It may do more harm than good, especially if it's reporting >85% balance to CL.
While a high utilization may knock a score up to 70 points, you can't beat a 20 year age of credit. Utilization can be fixed in a month or two. It'll take him years to get that age again.
Not necessarily. Once the wifes cards are paid down, I don't see why the OP couldn't be added back onto her cards. As utilization is weighed heavier than AAoA, I would definitely wait for the balances to be <30% of credit line before adding back to them.

No, this is Amex. It'll report as a new account hitting his credit again for a new tradeline and bringing the AAoA even lower. The history no longer transfers over.

Re: Too many new cards

Brian_Earl_Spilner — Mon, 19 Nov 2018 04:29:51 GMT

@Anonymous wrote:
OP here.
If I re-add my wife Amex card again. Will that help?

I do have other accounts and installments paid in full.

I think I caused more harm now.

No, you'll make it worse.

Re: Too many new cards

ChargedUp — Mon, 19 Nov 2018 04:39:29 GMT

@Brian_Earl_Spilner wrote:
@ChargedUp wrote:
@Brian_Earl_Spilner wrote:
@ChargedUp wrote:
@Anonymous wrote:
As stated above, it's your removal of AU on a card that has been alive for 18 years, that's one of the reason since AAoA dropped compared to the new accounts. IF you had not removed the 18 year account, that would have have saved your score.
Keep in mind also the OP states that card is carrying a high balance. It may do more harm than good, especially if it's reporting >85% balance to CL.
While a high utilization may knock a score up to 70 points, you can't beat a 20 year age of credit. Utilization can be fixed in a month or two. It'll take him years to get that age again.
Not necessarily. Once the wifes cards are paid down, I don't see why the OP couldn't be added back onto her cards. As utilization is weighed heavier than AAoA, I would definitely wait for the balances to be <30% of credit line before adding back to them.

No, this is Amex. It'll report as a new account hitting his credit again for a new tradeline and bringing the AAoA even lower. The history no longer transfers over.

Yeah, that's right.. I forgot about Amex not transferring account history to AU's anymore.

Re: Too many new cards

Anonymous — Mon, 19 Nov 2018 06:37:37 GMT

OP here.

Thank you all for the feedback. The only account with a long history is active capital one with 14 years. Now, my credit report is displaying average age of 4 years.

What is possible to raise my credit score again?

Since I applied and approved for multiple cards.

Do I now have a risk of loosing those cards with multiple open accounts? Meaning, will the credit card think it a risk now?

Re: Too many new cards

Anonymous — Mon, 19 Nov 2018 06:58:12 GMT

@Anonymous wrote:
This summer I applied for 5 cards and 1 charge card and all of them got approved. My credit score at the time was 700 and now down to 655. I think a made a mistake... the reason I applied was to get a strong credit score. I thought...

Before applied, I had the below accounts:

Wife 2 cards on Amex for 18 years (I removed this due to high balances)
School loan $16,000
Capital one $1200

I haven’t put any debt on the cards and all of them are displaying at zero balance. When will my credit score jump back up to the 700 range again?

My Experian file is now displaying as

1. A short credit history
2. Heavy use of credit
3. Non mortgage installment is high

Okay it may seem like the doom and gloom but you got approved for all 6! Big pat on the back to you! And by the way Welcome Aboard! I'm gonna play the devil's advocate here. But first, applying for more cards is not the path to a stronger credit score I can tell you that much and read up on here the experts can guide you on how to achieve this. That student loan there's no getting away from --- make sure you have that sorted out hopefully with a low interest rate there are some good deals out there if you're approved. And if I'm following this thread correctly, you excused yourself as an AU on your DW account which was your oldest account on file?

Put your tanked scores aside it's not the end of the world. If the action you took was well worth it to you personally (the return) then all is well! Like the old saying "Strike while the iron is hot" but just not to a point where you break it heheh...

Yes you can bring those scores back up again it's gonna take some time. Which I'm hoping we all have plenty of...

Re: Too many new cards

Anonymous — Mon, 19 Nov 2018 12:45:39 GMT

@Anonymous wrote:
This summer I applied for 5 cards and 1 charge card and all of them got approved. My credit score at the time was 700 and now down to 655. I think a made a mistake... the reason I applied was to get a strong credit score. I thought...

Before applied, I had the below accounts:

Wife 2 cards on Amex for 18 years (I removed this due to high balances)
School loan $16,000
Capital one $1200

I haven’t put any debt on the cards and all of them are displaying at zero balance. When will my credit score jump back up to the 700 range again?

My Experian file is now displaying as

1. A short credit history
2. Heavy use of credit
3. Non mortgage installment is high

It may seem counter-intuitive but you do not build "a strong credit score" by opening new accounts. Your credit score grows when you make all your payments on time, and keep your credit utilization low. Those two factors alone account for 65 percent of your credit score. Multiple new accounts will broaden your overall credit profile but they don't immediately add to your credit score.

When you open a new credit account several things occur; none of which are immediately positive.

1. You incur hard pulls/inquiries, which depending on your credit profile can cost between 1-5 points each.

2. You lower your Average Age of Accounts which causes a drop in scores, especially if your AAoA falls below 2 years. Fortunately that isn't the case with you.

3. You reset your Age of Youngest Account to zero. This too causes a scoring penalty because each new account represents increased risk to the lender as they don't yet know how you will use the account.

Then you compounded the loss of points by removing the AU account which would have at least contributed to your Average Age of Accounts.

The good news is that you will begin to regain the lost points soon enough. The points lost to inquiries/hard pulls will mostly be regained in six months, and by the end of a year the recent inquiries will no longer cost you even though they will still remain on your credit report for an additional year. Similarly, as your AAoA and AoYA start to increase with each passing month you will also start to regain the lost points, especially if you handle the new accounts responsibly. As the new accounts age you should see small increases in your scores monthly, then a larger increase when your youngest account reaches 1 year.

Re: Too many new cards

NRB525 — Mon, 19 Nov 2018 07:22:25 GMT

OP, please clarify something that is critical to understanding your score drop.

Are all, every one of the revolving credit cards you are associated with reporting zero balances? Are the last statement balances on every one of those cards, even the Cap One AU card, reporting zero on the statements because they are paid off?

Here is why this is important: FICO wants to see at least one revolving credit card with a balance on the statement. That balance can ( and ideally should ) be paid by the payment due date listed on that statement, but seeing a balance on at least one statement is vital.

Re: Too many new cards

AverageJoesCredit — Mon, 19 Nov 2018 11:59:10 GMT

Excellent advice on this thread

Op, damage is done lol, time and payment history will heal. Definetely let one card report something as NRB525 alluded to.

Re: Too many new cards

jamesdwi — Mon, 19 Nov 2018 12:28:39 GMT

AverageJoe nails it, usually at 5-6 months new card damage is lessened. Your score is close to what it was before, if your UTL remains the same or less. I don't worry about the damage a new card or two does, because you usually aren't on the market for new credit since you just got more credit. Hopefully they gave you decent credit limits on these cards. If they are the dreaded $1k or less credit limits, you may be doommed to close the cards in the future, because lenders some time saddle these type of approvals with a flag that made the cards extremely hard to grow. But all these cards will help to insulate your AAoA in the future. My 40+ accounts means a new card only reduces my AAoA by 1 month when a new one pops up. Of course some lenders will doom you to instant denials for the next 2 years because of 5/24 rule.

Re: Too many new cards

Namaste7 — Mon, 19 Nov 2018 18:32:05 GMT

If OP needed to establish their own credit profile, the AU served it's purpose in allowing OP to 'get in the door'. Now, one can dispute whether the number of accounts were warranted (or not), but that factor cannot be changed.

OP, why do you even care about a score generated yesterday or today if you have the cards you need? Establish your credit relationship with the lenders, allow the accounts to age, use responsiblity and your credit profile will be stronger over time.

Put the worry aside and focus on the long-term game.