topic Re: Credit Score in Understanding FICO® Scoring

Credit Score

Anonymous — Fri, 17 May 2019 17:12:15 GMT

I got approved through my Credit Union for a 15,000 limit. with a score of 671 at the time. Thought it would lift my score up some. Two months later ad my score is 675. Balance doesn't go higher than 7%, and been payig on time. My question: Am I expctig too much too soon?

Re: Credit Score

Tonya-E — Fri, 17 May 2019 17:30:48 GMT

Hi,

I definitely don't think you are expecting too much. I think you are expecting it too soon. It takes more than 2 months to demonstrate history. In addition to that, adding a tradeline decreases your score (both from the inquiry and the reduced age of accounts). To have an increase is actually quite good as it can sometimes initially be a wash (neither increase nor decrease- and out of the 2 more likely to decrease). I would say give it until 6 months and you will likely see some additional increases. 1 year would be even better. 2 years, better than that.

Re: Credit Score

Anonymous — Fri, 17 May 2019 17:28:47 GMT

@Anonymous wrote:
I got approved through my Credit Union for a 15,000 limit. with a score of 671 at the time. Thought it would lift my score up some. Two months later ad my score is 675. Balance doesn't go higher than 7%, and been payig on time. My question: Am I expctig too much too soon?

You'd have to provide us additional information to really give you an answer. The majority of the time, scores are expected to go down, not up, when a new account is opened. The reason why is that your average age of accounts (AAoA) drops with the the addition of a new account and your age of youngest account (AoYA) drops to 0 months as well. In addition to that, an inquiry or inquiries are associated with the opening of a new account, something that also can adversely impact a credit score.

[Greater] credit limits in and of themselves do not improve FICO scores. For example, I could open up 5 more credit cards today all with $30k limits, adding $150k in revolving credit lines to my profile and my FICO scores would not improve even a single FICO point from those new limits. The reason why depends on where your utilization sits both before and after the new account(s). If your utilization is already low, additional credit won't cause your utilization to drop below a threshold, so no score gain would be realized. If your utilization was elevated, the new account could cause you to drop across a threshold and see a score gain. The score gain could very easily be diluted or washed away completely due to the score-dropping factors I mentioned in the previous paragraph though.

If you go ahead and list out your revolving credit accounts with their balances/limits limits before/after the addition of this new $15k CL, it would be much easier to illustrate the utilization change with real numbers.