topic Re: will this new card lower my FICO score? in Understanding FICO® Scoring

will this new card lower my FICO score?

Anonymous — Mon, 25 Feb 2013 18:33:32 GMT

I'm just learning about how credit scores work, so I need your help.

I recently applied for a card that I don't need (United Explorer). I was accepted with a $25,000 limit. They sent me the card which I received last week. I have not yet activate it. I was planning to keep the card for 11 months, then cancel it to avoid the $95 annual fee. I'm now thinking that this might be a stupid plan because I am afraid it will lower my average account age and lower my credit score. My stats are listed below.

So my questions:

1) Would activating this card, then closing it after 11 months, lower my credit score by reducing my average account age?
2) Should I immediately tell the card company (Chase) that I don't want the card? Since I have not yet activated it, I'm thining maybe it will never appear on a credit report.

My stats:

From MyFico:

My TransUnion FICO score: 779

14 accounts (7 open, 7 closed)

0 delinquent

0 derogatory

0 public records

UTIL ratio 4%

Oldest account 19 years

Average age 7 years

The weakest part of my score is the amount of new credit that I've requested; I opened up two new cards in the past year.

From Equifax:

Total credit limit $121,000

Average account age 8 years

Thanks in advance!

Re: will this new card lower my FICO score?

Epcot — Mon, 25 Feb 2013 18:36:32 GMT

Unfortunately you already took the hit for AAoA and Inquiry. Regardless if you don't activate it or cancel the card it will report. Go ahead and enjoy your new card!

Re: will this new card lower my FICO score?

dodfire — Mon, 25 Feb 2013 18:45:55 GMT

True my friend....too late to shut the gate now...the cows are already out! You might take a minor ding on your score for the new card but I doubt it will be much and after 6-12 months you will never notice it. Thats my 2 pennies.

Re: will this new card lower my FICO score?

thom02099 — Mon, 25 Feb 2013 21:49:27 GMT

@Anonymous wrote:
I'm just learning about how credit scores work, so I need your help.

I recently applied for a card that I don't need (United Explorer). I was accepted with a $25,000 limit. They sent me the card which I received last week. I have not yet activate it. I was planning to keep the card for 11 months, then cancel it to avoid the $95 annual fee. I'm now thinking that this might be a stupid plan because I am afraid it will lower my average account age and lower my credit score. My stats are listed below.

So my questions:
1) Would activating this card, then closing it after 11 months, lower my credit score by reducing my average account age?
2) Should I immediately tell the card company (Chase) that I don't want the card? Since I have not yet activated it, I'm thining maybe it will never appear on a credit report.

My stats:

From MyFico:
My TransUnion FICO score: 779
14 accounts (7 open, 7 closed)
0 delinquent
0 derogatory
0 public records
UTIL ratio 4%
Oldest account 19 years
Average age 7 years
The weakest part of my score is the amount of new credit that I've requested; I opened up two new cards in the past year.

From Equifax:
Total credit limit $121,000
Average account age 8 years

Thanks in advance!

What the others said. Unfortunately, it's likely too late to undo what is done. Chase is very quick in reporting accounts to the CRAs, usually within days of your application and approval. Has nothing to do with when you receive the card and start using it.

Dings. Now that's going to be interesting for you. You might get a ding for the inquiry and new TL, but then will recuperate in a matter of months from the new TL. Also, with a $25K CL, your total credit available will go up by that amount and will further reduce your util. You AAofA may take a small ding, nothing significant though with just one card. AAofA takes a hit with folks that get a goodly number of new cards in a short period of time.

The unknown. Did they indicate what report they pulled? Chase is known to pull EX most of the time. Do you know where you stand with EX?

For whatever reason, when you get into the higher 700s in score and have older accounts with low util, those dings just don't seem to be as prominent. Previously, when my TU was above 750 and more in the 770s, the dings that I took for CLI that I got in January and late 2012 were practically non-existent. Small dings, only a point or three, and it has bounced back with the new util ratio and CL. I have a similar profile, 21years on hx, util at 5%, available credit at $115K and my TU just went to 813 this month.

Personally, if I were you, I'd either sock drawer the card or use it! You're likely not to take much of a score hit by keeping the card, and if you can't justify the AF when it rolls around, close it then.

Good Luck in whichever route you choose!

Re: will this new card lower my FICO score?

Anonymous — Mon, 25 Feb 2013 22:20:24 GMT

Many thanks, all, for your advice. The Chase card that I recently got pulled the CR from Experion. I am not sure what my score is with them. I've tried three times to get it over the past 24 hours, but all failed! Jack