topic Re: "New" Credit in Rebuilding Your Credit

"New" Credit

Stugotsv10 — Sat, 05 Jun 2021 12:19:58 GMT

I just have a quick question

New credit "hurts" your score and lowers your average credit BUT, a new installment loan that is paid off within the first 6 months after its paid off is it still considered "new" credit and still hurting you?

Re: "New" Credit

Brian_Earl_Spilner — Sat, 05 Jun 2021 12:40:08 GMT

Typically credit is consider new for a year for scoring purposes.

Re: "New" Credit

Stugotsv10 — Sat, 05 Jun 2021 12:52:48 GMT

Got cha!! so paying it off won't change that at all right?

Re: "New" Credit

Horseshoez — Sat, 05 Jun 2021 12:58:53 GMT

@Stugotsv10 wrote:
I just have a quick question

New credit "hurts" your score and lowers your average credit BUT, a new installment loan that is paid off within the first 6 months after its paid off is it still considered "new" credit and still hurting you?

I guess it depends upon which score card one is on; for me with a dirty score card, each time I've added credit my scores have gone up, and then each time they've aged to a new month threshold, my scores have gone up again.

Re: "New" Credit

Brian_Earl_Spilner — Sat, 05 Jun 2021 13:04:34 GMT

@Stugotsv10 wrote:
Got cha!! so paying it off won't change that at all right?

You get points back when AoYA hits 12 months

Re: "New" Credit

Brian_Earl_Spilner — Sat, 05 Jun 2021 13:06:45 GMT

@Horseshoez wrote:
@Stugotsv10 wrote:
I just have a quick question

New credit "hurts" your score and lowers your average credit BUT, a new installment loan that is paid off within the first 6 months after its paid off is it still considered "new" credit and still hurting you?
I guess it depends upon which score card one is on; for me with a dirty score card, each time I've added credit my scores have gone up, and then each time they've aged to a new month threshold, my scores have gone up again.

That's typical until you've gotten your 3rd card. After that the scores will react in the typical way, dirty or clean.

Re: "New" Credit

Horseshoez — Sat, 05 Jun 2021 13:13:37 GMT

@Brian_Earl_Spilner wrote:
@Horseshoez wrote:
@Stugotsv10 wrote:
I just have a quick question

New credit "hurts" your score and lowers your average credit BUT, a new installment loan that is paid off within the first 6 months after its paid off is it still considered "new" credit and still hurting you?
I guess it depends upon which score card one is on; for me with a dirty score card, each time I've added credit my scores have gone up, and then each time they've aged to a new month threshold, my scores have gone up again.
That's typical until you've gotten your 3rd card. After that the scores will react in the typical way, dirty or clean.

Hmmm, looking at my Experian FICO 8 Score Tracker, when I opened my third card my score jumped 11 points. When I opened my SSL they dropped 5 points, for a month or so, and then went up 7 points. Not sure what else to make of it; this is the exact same respose I've seen to opening up previous cards.

Re: "New" Credit

Brian_Earl_Spilner — Sat, 05 Jun 2021 13:26:47 GMT

@Horseshoez wrote:
@Brian_Earl_Spilner wrote:
@Horseshoez wrote:
@Stugotsv10 wrote:
I just have a quick question

New credit "hurts" your score and lowers your average credit BUT, a new installment loan that is paid off within the first 6 months after its paid off is it still considered "new" credit and still hurting you?
I guess it depends upon which score card one is on; for me with a dirty score card, each time I've added credit my scores have gone up, and then each time they've aged to a new month threshold, my scores have gone up again.
That's typical until you've gotten your 3rd card. After that the scores will react in the typical way, dirty or clean.
Hmmm, looking at my Experian FICO 8 Score Tracker, when I opened my third card my score jumped 11 points. When I opened my SSL they dropped 5 points, for a month or so, and then went up 7 points. Not sure what else to make of it; this is the exact same respose I've seen to opening up previous cards.

Again, typical for new and rebuilding credit. First 3 cards will usually give a score boost. After that you lose points when you open a new card unless the score gain from lowering aggregate utilization is larger than the point loss from opening the card. Loans will give you points for credit mix if you don't have an existing installment, but you still take a hit for new account. Scores go up as you pay it down and it ages.

Re: "New" Credit

Slabenstein — Sat, 05 Jun 2021 13:50:32 GMT

@Brian_Earl_Spilner wrote:
@Stugotsv10 wrote:
Got cha!! so paying it off won't change that at all right?
You get points back when AoYA hits 12 months

An installment wouldn't cause scorecard reassignment on 8/9, and it would take 18 mo's to be reassigned to mature on the mortgage scores.

@Stugotsv10 , closed accounts are included in FICO aging metrics, so you can't undo a young account's aging impacts by closing it, if that's what you're asking.