topic Re: A strange situation... in Understanding FICO® Scoring

A strange situation...

Anonymous — Sun, 26 Feb 2012 16:17:15 GMT

I have a rather odd situation I'd appreciate comments on. I have slowly, and painfully, pulled my credit scores up to 781. The weakest area is hits taken when applying for new credit. I have a Dillard's card I rarely use, preferring the Visa instead. This weekend the store offered 40 percent off if a Dillard's card was used. Since I was spending $600, it seemed like a good idea. When the clerk attempted to use my card it was discovered the card had been closed due to inactivity. She reapplied and I received instant approval. Will this be considered a new account since its basically replacing an old one that had been cancelled? The credit simulator indicated my score could drop to 771. Now I'm not too sure that a 10 point drop in my credit score was worth the $250 saved! Any thoughts?

Re: A strange situation...

Guava — Sun, 26 Feb 2012 16:32:54 GMT

IMO, it will be a new account

Re: A strange situation...

Anonymous — Sun, 26 Feb 2012 16:35:59 GMT

Yikes ... That's all I need is another ding on my credit score.

Re: A strange situation...

Anonymous — Sun, 26 Feb 2012 16:38:56 GMT

It might be worth the $250 savings. I'm pretty sure your credit score will bounce back. Would it be possiblle to call to see if they can back date the card?

Re: A strange situation...

Anonymous — Sun, 26 Feb 2012 16:42:26 GMT

Don't mean to be thick headed here, but I should ask Dillard's to show the card approved on the date it was opened originally? That sure would help!

Re: A strange situation...

Guava — Sun, 26 Feb 2012 16:45:18 GMT

I've only heard of AMEX doing backdating, though it doesn't hurt to ask

Re: A strange situation...

Jazzzy — Sun, 26 Feb 2012 17:00:55 GMT

The 10 point drop is definitely worth it (unless you are applying for something where a 770+ score is a huge problem as related to a 780+ score)...but I doubt that's the case. Keep your credit score in perspective. If it shows as a new account, that...in the end...will give you another positive trade line that will benefit you in the future. Often the short-term ding is worth the long-term benefit.

Last time I got a new card my score went up...not down.

Re: A strange situation...

Anonymous — Sun, 26 Feb 2012 17:56:56 GMT

Thanks for the advice. I will definitely ask for a backdated account but if Dillard's won't do it, I won't sweat it. The line of credit was only $1500.00 so maybe it won't hurt me too badly.

Re: A strange situation...

RobertEG — Sun, 26 Feb 2012 21:52:33 GMT

It is likely that they did a new inquiry to ensure that your current credit was not in the tank before they approved renewal of use of the card.

However, that is only a small ding limited to one year.

New account numbers are given all the time without altering the original date opened. Lost and stolen cards come to mind.

I would argue with them if they updated the date opened, even if they gave it a new acct no.

They loose nothing by maintaining the original open date, and you maintain your AAoA.

Most likely, they dont understand AAoA. I would give them a call after the account posts, and ask for reset of the date opened if they altered it.

Re: A strange situation...

Anonymous — Tue, 28 Feb 2012 05:04:08 GMT

I'm sorry, I don't understand half of what is said or how this whole complicated process of credit scoring works. I re-opened the account last week and it's already hit my credit account and my score dropped TWENTY points. I have paid off all but one of my credit cards, that was months ago, and I still show having several cards with balances. Yet I replace a closed card and it shows up in less than a week. Unbelievable. I truly want to scream. Actually, at this point I'm tempted to just bury whatever money I have under a tree in the backyard and give up on credit entirely!

Re: A strange situation...

Anonymous — Tue, 28 Feb 2012 05:08:58 GMT

What about doing a dispute to try and explain the situation? Does anyone think that might work? It's just that I've worked so hard to get my score what it was to have it affected by something like this.

Re: A strange situation...

atarvuzdar — Tue, 28 Feb 2012 13:51:26 GMT

I'm pretty sure the hit to your score will be temporary--the effect of the new inquiry on your score will be gone in a year, and a new tradeline with $1500.00 to include in your utilization calculation will also help. In general, keep all accounts active, but showing a $0 balance on your credit reports, except keep a balance on 1 credit card, showing 9% or less utilization (so on a credit card with a $1500 balance let no more than $135 report). In order to do this just make sure you pay the balances on your accounts BEFORE the credit card companies even issue your statement.

Anyway, long story short, this new credit card will probably benefit you in the long-term for the inconvenience of the score drop in the short-term.

I would also call them up and ask them to just show the same "date opened" on your new account as was on your old account. It won't hurt one bit to call and ask.

Good luck!

Re: A strange situation...

Walt_K — Tue, 28 Feb 2012 15:01:56 GMT

@Anonymous wrote:
I'm sorry, I don't understand half of what is said or how this whole complicated process of credit scoring works. I re-opened the account last week and it's already hit my credit account and my score dropped TWENTY points. I have paid off all but one of my credit cards, that was months ago, and I still show having several cards with balances. Yet I replace a closed card and it shows up in less than a week. Unbelievable. I truly want to scream. Actually, at this point I'm tempted to just bury whatever money I have under a tree in the backyard and give up on credit entirely!

Everyone generally only updates once a month. Your cards won't update their balances until the next bill comes, and then within a few days, they will show whatever balance was due on your bill. The new account shows up based on when you apply for a new account. Some are quicker than others to report new accounts, but there's a reason it shows up on a different timeframe. There's nothing to report until you apply, and then there's a new account.

You'll likely have those 20 points back in 6 months. As others have said, see if you can get your date opened changed to the same date as the old account. Can't hurt to ask. I wouldn't dispute anything with the CRAs. It doesn't seem like you have anything that is inaccurate, the dispute is just goiing to come back verified, and you might end up with a dispute comment on the tradeline that you'll later need to have removed if you want to apply for a mortgage.

All in all, your score is still a great score. It will rebound fairly quickly. I'm guessing you have a fairly thin file? 20 points is a lot to lose for adding one new account. As your AAoA improves over the years, adding one new account shouldn't hurt that bad. How many accounts do you have?

Re: A strange situation...

Anonymous — Tue, 28 Feb 2012 16:15:39 GMT

Is there a purchase in your future that you are worried about? (House, maybe?)

Because, a 780 to a 760 is not as bad as a 630 to a 610. I understand you worked hard to get to that, but it'll go back up.

If you are worried about the AAOA, just give them a call and see if they can backdate it and hook you up.

Re: A strange situation...

Anonymous — Tue, 28 Feb 2012 16:24:42 GMT

You're right, I'm probably overreacting - there is nothing coming up that I need a higher score. It's just that I worked so hard to get it that high and then something that stupid drops it so much. Guess I'll just have to sit tight and wait. Thanks.

Re: A strange situation...

Anonymous — Tue, 28 Feb 2012 16:32:11 GMT

@Anonymous wrote:
You're right, I'm probably overreacting - there is nothing coming up that I need a higher score. It's just that I worked so hard to get it that high and then something that stupid drops it so much. Guess I'll just have to sit tight and wait. Thanks.

In that case, I'd be a lot happier about the fact that I saved $250.

That's a hell of a lot of savings.

Do you know how many credit reports/scores you could buy with that!?!

Re: A strange situation...

Anonymous — Tue, 28 Feb 2012 16:43:09 GMT

And I'm sorry, I don't understand what all these acronyms mean ... What is AAOA?

Re: A strange situation...

Anonymous — Tue, 28 Feb 2012 16:44:05 GMT

Average Age of Accounts

Re: A strange situation...

Anonymous — Tue, 28 Feb 2012 16:44:34 GMT

And you're also right as to saving money - $250 is a big savings!