FICO score drop after using a previously-idle credit card

[haulingthescoreup]

Ah, good, I have someone hacking their way through the jungle ahead of me!

Do you know the before and after average age of your accounts? 10 new ones--I'm very impressed! You might well be in negative numbers by now (not mathematically possible, I know.)

[Anonymous]

Actually my EQ fico went from 627 about a week after my app spree started to 679 now. I do not know what is was before my Jan app spree as I did not get SW until after I started app spree. 2 accounts opened in dec the rest late jan to early feb.

Age of accounts oldest = 18 yrs. 9 mo., and one more 18 + yrs. Had one other cc priior to dec and that is 2yrs this month.

Current avg age is 3 yrs 8 mo.

[Lel]

Wow, 6 cards and a car loan.  That certainly would make an impact.  It's interesting that there was such a small effect on your EQ score as compared to TU and EX.

My wife went through a card-application spree last year as she picked up store cards from Sears, Mervyn's, and OSH in order to get 10% discounts.  We haven't checked her FICO score yet (though we did get fooled into buying a FAKO from TU), but I suspect that she'll see a mixed effect - too many new accounts, but she didn't have that many individual credit accounts before so her total credit is now higher than before and thus utilization is lower.  We'll see.

I've only been on myfico for a couple weeks, but I find this to be a new obsession for me, especially since I hope to keep my scores up to hopefully refinance my mortgage with the new jumbo conforming limits.

[Anonymous]

When I reused an old, dormant account I actually saw a 7 point increase. Then I saw another 7 point increase from a CLI on that account from $200 to $5000.

[Anonymous]

Use it but pay before the statement date to a $0 balance ---  doing this with Target, Exxon, Citgo, Chevron, HD, etc --- I know it helps util and 'cards having a balance'... we'll see if this helps in the score department because other than letting things get older it's all I can control right now (other than not missing a payment)

[haulingthescoreup]

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@Lel wrote:

Wow, 6 cards and a car loan.  That certainly would make an impact.  It's interesting that there was such a small effect on your EQ score as compared to TU and EX.

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Like your wife, I hardly had any credit lines before. This was a long-planned rearranging of my credit profile.

The only reason that EQ didn't plummet with the rest is that I'm trying to get my J.Crew card to update. It shows a balance from December, which was paid off in early January. J.Crew blithely tells me that they update weekly (yeah, right), and that the CRA's take 60-90 days to post the updates (huh, this doesn't happen with any of my other scores.)

Anyway, the J.Crew account has my major baddie (a 90-day from 24 months ago). And since I disputed the balance with EQ in an effort to make the fool card update, it's held out of scoring during the dispute, and the late doesn't get factored in. EQ is always my lowest, so it still makes me jump to see it higher that the others. That certainly won't last, though!

[Lel]

Well, I'm going to try this strategy of paying off the credit cards before the posting date and see how this affects my score.  I'm trying to keep my scores up because I'm looking at possibly refinancing a home equity loan with a lower interest rate HELOC, but this new, maxed-out revolving account is going to take a huge divot out of my score.  This wouldn't be such a big deal if it weren't for the fact that I also want to refi our first loan, provided that the interest rates for the new "jumbo conforming" loans start falling in line with conventional mortgage rates (for loans up to $417,000).

If I can get a decent bump up with some fancy credit card manuvers, then my score my tolerate the HELOC effect.

[grneydangl]

So say your plan is to pay off all of your credit cards to repair your credit... In my case I can pay off:

Gap - August 08

Macy's - November 08

Cap1 - January 09

Cap1 - January 10

While Im paying off the debts that will take a year or two, I don't want to use them, they have been sock drawer-ed... too many times Ive paid close to half of it off with the intentionn to keep paying but then I start flipping spending again.  So for my Cap1 cards since I won't be using them, when they are paid off and I start to use them (util 5%) is it considered "reporting recent activity on a dormant account"?  Because as long as I have a balance that Im making payments on, that isnt considered dormant is it?

[Anonymous]

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grneydangl wrote:

So say your plan is to pay off all of your credit cards to repair your credit... In my case I can pay off:

Gap - August 08

Macy's - November 08

Cap1 - January 09

Cap1 - January 10

While Im paying off the debts that will take a year or two, I don't want to use them, they have been sock drawer-ed... too many times Ive paid close to half of it off with the intentionn to keep paying but then I start flipping spending again.  So for my Cap1 cards since I won't be using them, when they are paid off and I start to use them (util 5%) is it considered "reporting recent activity on a dormant account"?  Because as long as I have a balance that Im making payments on, that isnt considered dormant is it?

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No, it's not considered dormant.  Great question, though!

FICO doesn't consider an account dormant as long as the creditor updates.  A creditor will update if you just make a payment; you don't have to charge anything.