topic Re: "Thick start" pros and cons in Understanding FICO® Scoring

"Thick start" pros and cons

KJinNC — Mon, 03 Jun 2019 23:54:10 GMT

I am a little over two months into a build/rebuild from a mostly empty profile, and without exactly intending to do this, I have begun what I will call a "thick start."

I will detail what I have, since definitions vary, but the purpose of this thread is to understand what pros and cons I might have compared with a perhaps more typical situation of someone slowly opening accounts as they build.

I've opened seven new accounts (plus an AU card) in two months. My oldest account is a Citi card I opened on April 2. My newest account is an Amazon Store Card opened on May 23. The other five are in between. The AU card is a 7-year-old account but I don't know how it will display on my reports. It hasn't appeared yet.

The accounts are:

- Discover secured, $500 CL

- Citi secured, $200 CL (sigh - should have done a bigger deposit - in the long run, I want a DC)

- Amazon Store Card, unsecured, $1,500 CL

- Capital One secured, $300 CL (sigh - does not graduate)

- Primor Green Dot secured, $300 CL (SIGH)

- Self Lender $500/12-month secured installment loan

- My Jeweler Club $5,000 CL (hasn't shown up on reports yet)

The AU is:

- Barclay Arrival Plus Mastercard, $25,000 CL (hasn't shown up on reports yet)

The exception to this is that on Equifax only, I have two old "open" accounts from 2010-2012, and one that shows as closed from that same era. In reality, all three are closed. But, this is why I have FICO scores for Equifax. On the other two (TU and EX), there is nothing older than April 2 2019. The old accounts all show positive with no lates, by the way. I have no derogs at all.

The old accounts on EQ only are:

- Discover Card, opened 2008, last activity 2012, $2000 CL (shows as open, is actually closed)

- Sunoco/Citi card, opened 2007, last activity 2010, $400 CL (shows as open, is actually closed)

- ExxonMobil card, opened 2007, last activity 2011, $950 CL (shows as closed)

I also have too many inquiries, due to applications I don't regret as well as applications I do regret. When not de-duping for multiple applications of the same type, I have 11 inquiries on Equifax, 9 on TU and 7 on EX. I'm not proud, it is what it is.

I don't care very much about applying for or getting anything that's hard to get in the next six months or so, but I would like to be able to start getting better cards, decent loan terms etc in 6-12 months. My intermediate goal is a good car loan. My longterm goal is a good mortgage. I see cards as a means to an end (building credit for those two uses) and have no particular goals specific to cards, beyond what will help me with those other goals.

All that said - I have a statement, a question and an offer.

The statement is, since I don't care about anything I'd be likely to be approved for in the first six months, I don't really mind the hit I took from credit-seeking behavior. I think in the long run, I will have a nice wall of aging accounts that will let me better absorb new accounts. I think the "thick start" method would be terrible for getting approved for better stuff in the short term, though.

The question is, does this remind you of you from the past? If so, what patterns did you see as far as changes in your scores, and what advice would you give for someone in my situation? What kinds of scores would you predict for me at 3 months/6 months/12 months, assuming PIF, no lates, and low utilization?

The offer is, is there anything that people would like me to track for research purposes?

Thanks!

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 03:33:21 GMT

My advice would be to not apply for any further credit until you either need it (auto loan like you said or eventually mortgage) or until your profiles/scores are good enough (say) around 730+ where you stand a strong chance of getting approved with favorable terms for whatever card(s) you'd like.

You said you've added 7-8 accounts to your profile in 2 months. That's a lot and more than enough to thicken your file and help absorb (age of accounts wise) new accounts in the future. Adding (say) 5 or 10 additional accounts in the next 6-12 months isn't going to benefit you IMO at all short/mid/long term at this point based on what you've already added. I think it's best you just sit tight with what you have, let aging do its thing and work on your profile/scores. In the meantime feel free to research some cards and if a few would benefit you, go ahead and apply for them once your scores are in a good place so that you get favorable terms.

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 12:46:22 GMT

I pretty much have to agree with BBS. I am actually a fan of the thick start for the reasons you outlined. It will help you absorb any negatives and put you in a better scorecard. For what it’s worth those inquiries will mean nothing 12 months from now scorewise. So don’t worry about them the point was acquiring the accounts and you did that congratulations! Now the only things you need are age and, we need to talk about the loan.

First u didn’t really give us very much information. What are your current FICO scores? What is your AooA? I assume your youngest account is one month? And you said your profile is clean?

From all recent data, it appears that you will receive a score bump at three months and six months AoYA. At 12 months you will be rebucket most likely which will result in a score change as well typically upwards. Points depend on scorecard and possibly a couple other attributes. Can you tell us how many points you lost when the first account report?

OK I think your 6 to 12 month timeline is a little ambitious. I think you need to back that up to 12 months. That way you can get your rebucketing points and not appear overzealous to potential creditors.

Last let’s talk about this loan you have. Unfortunately you only have a 12 month term. For optimal scoring you need an open installment loan with the B/L under 8.9%. By the time you get your 12 month award for AoYA your loan will terminate and you will lose points because of it. They may cancel each other out even at least to some degree. So how do you fix this? You go get another SSL right now with a longer-term get the inquiry and new account out the way now, so you can sit on your hands for 12 months. This time try to get a 60 month term at least. Read the thread on the share secured loan technique. Utilize it.

Re: "Thick start" pros and cons

Revelate — Tue, 04 Jun 2019 08:30:50 GMT

I wasn't quite as aggressive but I did the same basically when I started.

Being slightly loose with the dates I opened up 12 accounts in my first year (really the first 14 months as I'd opened a BOFA secured card 2 months before I found this forum right before I got my first auto loan). I then sat on my hands for 15 months prepping for a mortgage, though once that fell apart I went and picked up 4 more tradelines before sitting on my hands again to where I could pull the trigger on a mortgage. Basically if you're going to spree, hang out afterwards for a while which appears to be what you're planning anyway so I approve.

It's a different time now, things were more conservative in the credit market back in 2012 so I don't know if I could've gotten that many accounts right from the start though I suppose I could've done more secured tradelines, but ultimately it doesn't matter at all long term and it does buffer one's AAOA and various accounts with balances bit. We're still working on that TBH, sadly my file isn't clean enough on EQ to nail it down but I can probably do TU FICO 4 if I materially change my installment tradeline number; I don't really want to reset new accounts again (though installment line might not, actually I might do it in the name of science in a few months anyway if I get Cassie's data confirmed).

Either way I'm absolutely confident my file thickness is part of the reason I could shrug off that 60D late on TU that I was admittedly stupid on without being impacted for anything relevant.

Re: "Thick start" pros and cons

KJinNC — Tue, 04 Jun 2019 12:06:21 GMT

@Anonymous wrote:

First u didn’t really give us very much information. What are your current FICO scores? What is your AooA? I assume your youngest account is one month? And you said your profile is clean? My only FICO score is Equifax, because of the mystery old accounts that appear only on Equifax. My Equifax FICO 8 is in my signature (668 at last update). For TU and EX, I have only FAKO scores, which are currently around 615. I listed everything on my profile. Oldest account on TU and EX was opened on April 2, 2019. Yes, 100% clean (I did have some derogs that were removed via GWL).

From all recent that up in appears that you will receive a score bump at three months and six months AoYA. At 12 months you will be rebucket most likely which will result in a score change as well typically upwards. Points depend on scorecard and possibly a couple other attributes. Can you tell us how many points you lost when the first account report? I can't give a good clear answer, because this overlapped with removing some derogs. My scores were all over the place the first month or so. In FAKO, I will often see a new account drop my TU and raise my EQ or vice versa, I suppose because those two are calculated differently due to the phantom old accounts on EQ. I am waiting to see if EQ FICO goes up or down with the most recent additions.

OK I think your 6 to 12 month timeline is a little ambitious. I think you need to back that up to 12 months. That way you can get your rebucketing points and not appear overzealous to potential creditors.

Last let’s talk about this loan you have. Unfortunately you only have a 12 month term. For optimal scoring you need an open installment loan with the B/L under 8.9%. By the time you get your 12 month award for AoYA your loan will terminate and you will lose points because of it. They may cancel each other out even at least to some degree. So how do you fix this? You go get another SSL right now with a longer-term get the inquiry and new account out the way now, so you can sit on your hands for 12 months. This time try to get a 60 month term at least. Read the thread on the share secured loan technique. Utilize it. Thanks, will check that out. I'm also willing to get a car loan that's still not quite prime, as long as I'm not paying over 10%. So, I guess what I have in the back of my mind is getting the best car loan I can in about 6 months (reason I mentioned 6-12). Would a longer SSL still help, given that?

Thanks! My comments in blue.

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 12:16:54 GMT

No, the benefit of a SSL is only had when it is your only open installment loan. If you are planning on adding a car loan, adding the SSL first isn't going to help.

Also, you said you only have your EQ Fico 8 score. You can get your EX Fico 8 score for free at either creditscorecard.com or creditscore.com. I suggest signing up for one right away and the other 2 weeks later, as each of those scores will update once monthly. In doing that between the two sites you'll effectively be able to grab your EX Fico 8 score every other week.

Re: "Thick start" pros and cons

KJinNC — Tue, 04 Jun 2019 12:27:52 GMT

Thanks - I should have elaborated earlier - the reason I don't have a TU or EX FICO score is that my oldest account on those two is only two months old, and FICO won't calculate a score until you have at least one account that is six months old. So, I don't think I will be able to get FICO scores for those two until October, unless the AU counts (waiting for the AU to appear so I can find out, but I'm pessimistic on that point). I am able to get EQ FICO because of those old mystery accounts from 2010-2012 that appear only on EQ.

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 12:30:07 GMT

Gotcha. I didn't realize you didn't have 6 months of history on EX yet. Best to hold off until that time like you said to grab those EX Fico 8 scores.

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 12:35:58 GMT

Rev first off I’m going to help you nail down that EQ data point with your help. Second I need to do an SSL myself so if it doesn’t count I can do it now, if it does I’m gonna wait till I rebucket. I do need to get another card, but I can maybe delay it a month for the sake of science.

KJinNC OK as I was saying recent data shows you should get a bump at three months and six months. This has again been confirmed on clean/thin/non-aged/new account scoresheet. You can be our test case for confirmation that it also applies to clean/thick/non-aged/new account scoresheets, if you would be so kind as to report back your results. In order to do so we would simply need you to keep your individual and aggregate utilization the same between months two and three and five and six and then monitor the score changes. And as I said at 12 months you will see your score change.

Well for the best scores and the best rates you need to wait 12 months so you can get your 3 months 6 months and 12 months awards. If you absolutely can’t wait, then what you do is when you get ready to do the car loan, you go pay your SSL down to under 8.9% and that will give you a nice score bump.

What BBS is referring to is it works in the aggregate, so when you have more than one loan you’re only going to get that bump if the aggregate is under 8.9%. So since you have one already, you can pay it under 8.9%, get the score bump, and then get a loan at a better rate for the car. But the question is, is it going to terminate before your AoYA becomes 12 months? And depending on how good your score gets, it may not matter. You may find financing that pleases you, but I’m simply saying you could be leaving points on the table if you don’t take advantage of the AoYA points and the under 8.9% SSL points.

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 12:47:50 GMT

Yeah I understood why you didn’t get a score, I caught that (but I totally missed it in your signature LOL) and I don’t think the AU will give you that but I could be wrong we will find out

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 12:40:35 GMT

And actually adding the SSL before the car loan could help, because that would raise his score so that he could get the car loan at a better rate. Now once he got the car loan, it would become totally irrelevant of course and the benefit would disappear but he would’ve already gotten his lower interest financing at that point, which is the whole point of a good score to begin with right?

Re: "Thick start" pros and cons

Gmood1 — Tue, 04 Jun 2019 14:07:34 GMT

You should see a nice bump with the addition of the 7 year old AU account( If it back dates).

I can't remember exactly. But I did hammer my new accounts out in a very short period of time back in 2015.
My file was relatively thin before that but I had 2 CCs reporting, that were 8 years old. Along with a 5 month old mortgage and auto loan. At the time I still had some major baddies.
Use your CCs for everything you'd use a debit card. Basically put the debit card away.

Show as much use as your limits and budget will allow. To often I see people focus way too much on scores. Yeah, sure scores matter. But a nice well documented positive use of credit trumps scores and income IME.

Depending on the CC issuer of the AU account. It may help or it may hurt you, as not all issuers back date to the original open date of the account.

Make sure when you are added as an AU. That issuer back dates.

You have more than enough accounts now. Just sit back and watch your scores rise.

I don't suggest you doing this. But to give an idea of how scores rise. I've added between 15 and 20 new accounts a year for the last 4 years. My scores started in the mid 600's. I've been hovering in the mid to upper 700's for the last 3 years. Depending on the scoring model, the low 800's.

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 15:57:35 GMT

Yeah that AU is definitely going to help with the mortgage scores and if it counts for FICO 8, It’ll definitely give a nice bump there too, indeed.

Wow Gmood1, 15-20/year for 4 years? WOW! Are you going for the record?

Re: "Thick start" pros and cons

Gmood1 — Tue, 04 Jun 2019 16:31:01 GMT

Lol @Anonymous
No record my friend. You have members here that well out pace me in that area.😂
I like to push the boundaries a little.

I'd rather put my hands on something and learn first hand. Rather than try and figure it out strictly from analysis of others.

In order to do that, I had to jump in with both feet. 😆

Re: "Thick start" pros and cons

Anonymous — Tue, 04 Jun 2019 17:38:09 GMT

@Anonymous wrote:
And actually adding the SSL before the car loan could help, because that would raise his score so that he could get the car loan at a better rate. Now once he got the car loan, it would become totally irrelevant of course and the benefit would disappear but he would’ve already gotten his lower interest financing at that point, which is the whole point of a good score to begin with right?

It could help, but typically the addition of a SSL to better scores leading up to a "real" loan app happens sooner as to eliminate/reduce the age of accounts factors dropping and the inquiry impact. In certain situations those factors could easily wash out the gain from the SSL, resulting in little to no net gain on FICO scores.

Re: "Thick start" pros and cons

Revelate — Tue, 04 Jun 2019 18:55:32 GMT

@Anonymous wrote:
@Anonymous wrote:
And actually adding the SSL before the car loan could help, because that would raise his score so that he could get the car loan at a better rate. Now once he got the car loan, it would become totally irrelevant of course and the benefit would disappear but he would’ve already gotten his lower interest financing at that point, which is the whole point of a good score to begin with right?
It could help, but typically the addition of a SSL to better scores leading up to a "real" loan app happens sooner as to eliminate/reduce the age of accounts factors dropping and the inquiry impact. In certain situations those factors could easily wash out the gain from the SSL, resulting in little to no net gain on FICO scores.

Pretty much this; if you are in a derogatory scorecard and you know that your lender is pulling FICO 8 classic, and you're sure you're not passing a meaningful AAOA metric (2 year / 5 year in my experience but there are probably others just not sure within that range) then maybe I'd consider it... but if in a top 8 scorecard jury is still out, and if there's any score where a new installment loan hurts, it's going to be an Auto Enhanced industry option maybe even for derog files and those have made a lot of inroads into the market over the last two decades: my guess is just about every dealership lender uses them.

Also auto lending isn't that sensitive to score, 20 points isn't usually going to make or break your loan even in the best case as underwriting is utterly soft on auto lending by design, seriously easiest loan to get and there's a bunch of score improvement for new files even at the six or twelve month mark and if the APR is ugly just refinance it down at that point as part of your credit plans.

Re: "Thick start" pros and cons

KJinNC — Tue, 04 Jun 2019 19:01:06 GMT

Oddly, Capital 1 prequalification is showing me a 3.79% rate right now, but I don't believe it.

Cap1 does use Equifax, which is my best option right now due to those mystery old accounts.

But the reason I don't believe it is:

A - It will not calculate a payment for any vehicle unless I enter a trade-in of $2,200 or more. I can enter any downpayment, even 90% of the vehicle's price, and it will still say it can't calculate a payment.

B - 3.79% seems unrealistically good given my credit situation vs what i see other people qualify for.

So, I think it's a glitch of some kind, and may not materialize when I'm actually sitting there doing paperwork.

That said, I am very willing to take whatever loan I get in ~6 months as long as the interest rate is single-digits, with exactly that mindset, that I can refinance later. For what it's worth, I have been a member of Coastal Federal Credit Union for 32 years, and will probably use them.

Re: "Thick start" pros and cons

Revelate — Tue, 04 Jun 2019 19:23:24 GMT

I don't think you'll have any problem finding a single digit auto loan.

Lots of money to be lent in the auto industry, and to put it in perspective even with a recent 30D late I still pulled a 3.85 from USBank of all things. Specifically I was at EX FICO 8 of 750 and EX FICO 8 Auto of 755 around that time and with your file at least on EQ you will probably easily be at that; admittedly still have to make weight with your DP but should be fine.

Also I know historically Coastal has pulled EQ might be EQ only, bonus for you.

Re: "Thick start" pros and cons

MakingProgress — Wed, 05 Jun 2019 16:13:09 GMT

@Anonymous wrote:
Yeah I understood why you didn’t get a score, I caught that (but I totally missed it in your signature LOL) and I don’t think the AU will give you that but I could be wrong we will find out

It depends on how the AU account reports. If it backdates to the account opening then a score will generate. I added my DD as an AU on my QS and it hit her report with account opening date and a score generated. Prior to that she had no score and nothing on a CR. If the account reports with the date the AU was added then it won't speed up getting a score.

Re: "Thick start" pros and cons

Anonymous — Wed, 05 Jun 2019 20:22:12 GMT

Thank you for the clarification and confirmation on that. I wasn’t sure if it would allow the score to be generated solely based upon an AU. I’m glad to know that it will.