topic Re: How Much New Credit Is Considered Great? in Understanding FICO® Scoring

How Much New Credit Is Considered Great?

Anonymous — Tue, 11 Aug 2009 00:28:02 GMT

My wife has a combined credit score of 646. Her main knock is "length of credit history."

She is rated 'Good' on "Amount of New Credit."

She has one loan, which will be paid off next week, and one credit card, which has been paid on time every month.

What should/can we do to get her "Amount of New Credit" to 'Great'?

Re: How Much New Credit Is Considered Great?

cobaltnv — Tue, 11 Aug 2009 02:24:16 GMT

To get amount of new credit to be great you probably need no inq on your account--that is no new accounts for 2 years (maybe one year).

Re: How Much New Credit Is Considered Great?

cobaltnv — Tue, 11 Aug 2009 02:27:28 GMT

@Anonymous wrote:
My wife has a combined credit score of 646. Her main knock is "length of credit history."

She is rated 'Good' on "Amount of New Credit."

She has one loan, which will be paid off next week, and one credit card, which has been paid on time every month.

What should/can we do to get her "Amount of New Credit" to 'Great'?

What is a "combined credit score"?

If you have not already you might want to read credit scoring 101 which may be found in my siggy.

Re: How Much New Credit Is Considered Great?

Anonymous — Tue, 11 Aug 2009 14:48:58 GMT

According to myFICO "Hints" high achievers (760+) average 6 to 12 years AAoA, with an oldest account of 19 years.

A new account is considered new for 27 months, according to same source.

New inquiries do not factor into FICO after 12 months, but will show for 24 months.

Re: How Much New Credit Is Considered Great?

Anonymous — Tue, 11 Aug 2009 16:08:37 GMT

Hmmmm... other posts say that the one year anniversary is enough time for an account to no longer be 'new'

Re: How Much New Credit Is Considered Great?

Anonymous — Tue, 11 Aug 2009 18:55:44 GMT

1 year is "less" new, but still relatively new.

Since FICO is a peer comparative analysis, the fact that high achievers "average" 6 or more years AAoA and "average" having their newest account 27 months, anything less will in some manner will either hurt your score, or keep you from having as much gain.

You may achieve a level of neutral boyancy prior to those numbers, but in order to run with the top dogs, gonna have to have similar specs.

Of course these are "averages" and not static gotta have numbers. Nothing in FICO is static and linear.

Re: How Much New Credit Is Considered Great?

Anonymous — Tue, 11 Aug 2009 19:28:47 GMT

I have three accounts that will turn one year at the end of Oct. Will be interesting to see if there is any pop in scores for my bucket.

Re: How Much New Credit Is Considered Great?

Anonymous — Wed, 12 Aug 2009 01:31:07 GMT

I just had two accounts reach that magic 27 month milestone. No perceptible change at EQ but TU lifted me one category and I gained a whoping 2 points in my TU score.

Message Edited by geronimo2008 on 08-11-2009 06:31 PM

Re: How Much New Credit Is Considered Great?

RobertEG — Wed, 12 Aug 2009 09:34:39 GMT

New credit is not, in my opinion, a major focus that a consumer should fret about, or has much control over, once accounts are opened.

Length of credit history is only 15% of FICO. All you can do is to get older, and minimize the addition of new accounts that could reduce your AAoA.

New inquiries only affect scoring for one year, and only amount to 10% of your score.

New credit is never good for lenght of credit history or inquires used to get the new credit. New credit is secured because you need it, and as for FICO scoring, to maybe increase your CL, and thus reduce your % util.

Re: How Much New Credit Is Considered Great?

Anonymous — Wed, 12 Aug 2009 13:24:46 GMT

@RobertEG wrote:
New credit is not, in my opinion, a major focus that a consumer should fret about, or has much control over, once accounts are opened.
Length of credit history is only 15% of FICO. All you can do is to get older, and minimize the addition of new accounts that could reduce your AAoA.
New inquiries only affect scoring for one year, and only amount to 10% of your score.

New credit is never good for lenght of credit history or inquires used to get the new credit. New credit is secured because you need it, and as for FICO scoring, to maybe increase your CL, and thus reduce your % util.

15% (length of history) + 10% (inquiries) = 25% of FICO. That is a significant number while those areas are less than stellar. Luckily, the inquiries portion will only be a part of that for 1 year, at which time your accounts have aged a year and you should see gains.

Re: How Much New Credit Is Considered Great?

Anonymous — Wed, 12 Aug 2009 16:23:51 GMT

My AAoA and oldest account values are good. It's just the new accounts and INQs (on EX) that are dinging me now.

Message Edited by writemikep on 08-12-2009 09:23 AM