topic Re: I think I did something stupid... in General Credit Topics

I think I did something stupid...

JLL2104 — Sun, 09 Jun 2019 19:51:42 GMT

I recently applied for a loan with the bank I’ve done business with for years. I decided I didn’t want the loan and immediately voided or closed out the loan.
Problem is, it shows as a new account. Although it’s closed and paid as agreed, did I do something stupid and how long until the effects are gone??
FAKO dripped about 17 points. FICO dropped about 2
Should I just chalk it up as experience or is there anything else I could/should do?

Re: I think I did something stupid...

Remedios — Sun, 09 Jun 2019 20:00:59 GMT

@JLL2104 wrote:
I recently applied for a loan with the bank I’ve done business with for years. I decided I didn’t want the loan and immediately voided or closed out the loan.
Problem is, it shows as a new account. Although it’s closed and paid as agreed, did I do something stupid and how long until the effects are gone??
FAKO dripped about 17 points. FICO dropped about 2
Should I just chalk it up as experience or is there anything else I could/should do?

Yeah, just move on. Dont worry about Vantage score

Anyway, the only "damage" you did is dropping AAoA, which may or may not have happened depending on how many other accounts you have and their age.

I dont think you did anything stupid, but learning experience for sure.

Re: I think I did something stupid...

coreysw12 — Mon, 10 Jun 2019 04:53:44 GMT

Agreed, AAoA and the inquiry(s) are the reason your score took a hit, but in a few months those things won't be that relevant anymore. In 9 years, this mistake might even end up helping your scores, at it will be a pretty old account by then

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 05:02:11 GMT

@JLL2104 wrote:
I recently applied for a loan with the bank I’ve done business with for years. I decided I didn’t want the loan and immediately voided or closed out the loan.
Problem is, it shows as a new account. Although it’s closed and paid as agreed, did I do something stupid and how long until the effects are gone??
FAKO dripped about 17 points. FICO dropped about 2
Should I just chalk it up as experience or is there anything else I could/should do?

Probably not too bad....but I mainly came here because it said the same thing I say almost every day...I think I did something stupid....

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 05:03:16 GMT

If you ask they will probably get it removed for you.

Re: I think I did something stupid...

JLL2104 — Mon, 10 Jun 2019 05:07:29 GMT

Ask who Sarge? The bank or credit bureau?

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 05:11:14 GMT

@JLL2104 wrote:
Ask who Sarge? The bank or credit bureau?

The bank....They are the ones who sent it, you could dispute the info at the CRA's and I doubt the bank would take steps to keep it there, and once disputed if the bank did not respond within I think 30 days the CRA will remove it.

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 05:17:29 GMT

The loss in points is probably due to the inquiry though, and the inquiry will remain even if denied credit. The account can be removed, but the inquiry can't, but it's effects on score will only remain a year, and wont be on the report at all in 2 years.

Re: I think I did something stupid...

coreysw12 — Mon, 10 Jun 2019 05:17:24 GMT

@sarge12 wrote:
The loss in points is probably due to the inquiry though, and the inquiry will remain even if denied credit.

Ask them to remove the inquiry, too.

You have a relationship with this bank outside of just this loan, so they may be willing to help you out. Can't know if you don't ask.

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 05:21:05 GMT

@coreysw12 wrote:
@sarge12 wrote:
The loss in points is probably due to the inquiry though, and the inquiry will remain even if denied credit.
Ask them to remove the inquiry, too.

You have a relationship with this bank outside of just this loan, so they may be willing to help you out. Can't know if you don't ask.

I am not really sure the bank can remove an inquiry, at least I have never heard of it unless there was ID theft. If banks could, they may tell customers we will run your credit and if not approved remove it.

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 05:33:25 GMT

Think of it this way...disputing an inquiry can be done if you did not authorise the inquiry, but if that is the case then the bank instigated the inquiry without authorisation or someone claimed to be you to initiate the inquiry. I am not sure the bank could do that without it reflecting badly on them. Usually those are done in cases of identity theft, and the ding to your credit is way too small to be worth the effort for something like this. I guess the bank might could say it was meant to be a soft pull, but I have never heard of it being done.

Re: I think I did something stupid...

coreysw12 — Mon, 10 Jun 2019 05:42:28 GMT

At any rate, an inquiry starts losing relevance after 30 days, and is almost completely irrelevant after 12 months. So it's really not worth stressing over. I've seen people here who have 100+ inquiries on their reports, and still have decent scores and get approved for stuff. "New credit" only makes up ~10% of your score, and things stop being considered "new" after a pretty quick period of time.

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 06:22:38 GMT

@coreysw12 wrote:
At any rate, an inquiry starts losing relevance after 30 days, and is almost completely irrelevant after 12 months. So it's really not worth stressing over. I've seen people here who have 100+ inquiries on their reports, and still have decent scores and get approved for stuff. "New credit" only makes up ~10% of your score, and things stop being considered "new" after a pretty quick period of time.

No it is only a small amount of points, that remain the same, for 12 months and then all points return. It stays on the report for 24 months, but has no affect at all on the scores, but will still count for 5/24. Inqueries do not have gradually decreasing effect...but we are talking about 2-5 points here per inquiry. Even less if there are a lot of them.

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 06:31:55 GMT

I think I read where after a certain threshold is reached inqueries stop counting at all..like maybe 10 or so, but additional inqueries do not drop scores any further. One inquiry in the last 12 months will cost more points than the 10th inquiry does. If 1 costs 5 ponts, 10 will not cost 50 points, in fact I think it was 1-3 cost xxx points, and 3-6 cost xxx points etc until all points for inqueries are depleted.

Re: I think I did something stupid...

coreysw12 — Mon, 10 Jun 2019 06:56:46 GMT

@sarge12 wrote:
I think I read where after a certain threshold is reached inqueries stop counting at all..like maybe 10 or so, but additional inqueries do not drop scores any further. One inquiry in the last 12 months will cost more points than the 10th inquiry does. If 1 costs 5 ponts, 10 will not cost 50 points, in fact I think it was 1-3 cost xxx points, and 3-6 cost xxx points etc until all points for inqueries are depleted.

Sounds plausible, and in my experience seems pretty accurate. Going from 0 to 1 inquiry is a pretty substansial hit, but after that eash additional inquiry causes a lesser hit until eventually more inquiries seems to make no difference at all.

I have 10 inquiries, and the last couple inquiries barely affected my score, in fact I don't think they actually changed my score at all. But the first few did.

Age is also a big factor. People freak out that inquiries stay on your report for 24 months, but in reality they stop impacting your FICO after only 12 months, and between 0-12 months the impact gradually gets reduced to zero. Where an inquiry might drop your score by 10 points right away, after 6 months its impact might only be 4 points, after 9 months it's maybe 1 point, and after 12 months it's 0 points. I'm speaking generally and using estimated figures of course, but I think generally that's accurate.

Re: I think I did something stupid...

sarge12 — Mon, 10 Jun 2019 14:35:34 GMT

@coreysw12 wrote:
@sarge12 wrote:
I think I read where after a certain threshold is reached inqueries stop counting at all..like maybe 10 or so, but additional inqueries do not drop scores any further. One inquiry in the last 12 months will cost more points than the 10th inquiry does. If 1 costs 5 ponts, 10 will not cost 50 points, in fact I think it was 1-3 cost xxx points, and 3-6 cost xxx points etc until all points for inqueries are depleted.
Sounds plausible, and in my experience seems pretty accurate. Going from 0 to 1 inquiry is a pretty substansial hit, but after that eash additional inquiry causes a lesser hit until eventually more inquiries seems to make no difference at all.

I have 10 inquiries, and the last couple inquiries barely affected my score, in fact I don't think they actually changed my score at all. But the first few did.

Age is also a big factor. People freak out that inquiries stay on your report for 24 months, but in reality they stop impacting your FICO after only 12 months, and between 0-12 months the impact gradually gets reduced to zero. Where an inquiry might drop your score by 10 points right away, after 6 months its impact might only be 4 points, after 9 months it's maybe 1 point, and after 12 months it's 0 points. I'm speaking generally and using estimated figures of course, but I think generally that's accurate.

I have been told by someone who knows more than I ever will that the effect of an inquiry on the score does not decline in the effect like some things do. They told me if it drops 5 points for 1 inquiry in the last 12 months, it will still be 5 points until the 12 months aging occours. Whoever told me that could have been wrong though, and I can't even swear who it was.

Re: I think I did something stupid...

BallBounces — Mon, 10 Jun 2019 20:41:23 GMT

OP,

I don't think anyone has asked this relevant question:

How many other installment loans do you have open and closed?

Re: I think I did something stupid...

JLL2104 — Mon, 10 Jun 2019 23:14:34 GMT

I have a student loan, a one-main loan, and the one this thread is about

Re: I think I did something stupid...

BallBounces — Mon, 10 Jun 2019 23:43:55 GMT

OK.

Then yes, this loan is not very relevant. If you can get the INQ and tradeline removed, you should, otherwise this is not the worst thing in the world.