HP's effect on credit scores

[tmbr10]

Yesterday (5/21/12) I app'd and was approved for a Citibank Master card. Today MyFICO alerts me and says my score has dropped from 812 to 804 based on the new account HP. First HP in over two years!

Is an 8 point drop typical for an HP? I was prepared for 4 or 5 points. 8 points seems like alot with all things considered. Are the point reductions relative to the existing credit score? I've read were higher scores are more volatile and subject to greater fluctuations.

I assume after my AAofA absorbs this new acct, I'll be taxed a couple more points.

Thoughts?

[Mailak]

Really, you got that alert so soon? I had an HP on Saturday and I still haven't received a SW alert. I thought they were taking their time rather than it not having affected the EQ FICO.

[pipeguy]

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@tmbr10 wrote:

Yesterday (5/21/12) I app'd and was approved for a Citibank Master card. Today MyFICO alerts me and says my score has dropped from 812 to 804 based on the new account HP. First HP in over two years!

Is an 8 point drop typical for an HP? I was prepared for 4 or 5 points. 8 points seems like alot with all things considered. Are the point reductions relative to the existing credit score? I've read were higher scores are more volatile and subject to greater fluctuations.

I assume after my AAofA absorbs this new acct, I'll be taxed a couple more points.

Thoughts?

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There is no practical difference between a Fico 812 and 804 (or really between an 812 and a 760) as far as credit worth, APR's, etc. While your pride/ego might have taken a 1% hit for the HP, your "credit" escaped untouched. What good is credit if you don't use it as needed especially when you can expand your portfolio of tools with no actual scoring effect ?

[Anonymous]

I think the 8 point drop is pretty normal.  I too have had a simular drop before but after 60 days it went up like 15 points so as long as it was just a pull for your new card and you are in good standing with them for the next few months and really don't carry a balance then you should see a jump in your score before too long.  I wouldn't worry about it though at this point.

[bichonmom]

That's a big drop, but I've read about bigger ones here. There seem to be ranges where there's no impact, small impact and larger impact. Some say the more you get, the less it dings you; though I wouldn't want to test that!

[gettingstarted]

I too had a 7 point drop in my FICO score after a new credit card hit my CR so like the previous poster said as long as you remain in good standing and dont carry a balance your score will go back up.

[bichonmom]

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@gettingstarted wrote:

I too had a 7 point drop in my FICO score after a new credit card hit my CR so like the previous poster said as long as you remain in good standing and dont carry a balance your score will go back up.

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Just to clarify: There is a difference between a FICO dropping from an inq and from a new account reporting. FICO can drop as a direct result of an inq. New accounts drop your AAoA, which in turn can lower your FICO.

[Anonymous]

It cracks me up how concerned people are about INQs. The new account hit will drop you way more than an INQ will. I wouldn't worry about it.

[improvingmycredit]

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@Anonymous wrote:
It cracks me up how concerned people are about INQs. The new account hit will drop you way more than an INQ will. I wouldn't worry about it.

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Hey- not picking a fight!    I do believe there is something to be said for watching your inqs.  Those with the highest limits and highest scores have the fewest inq.  There is a reason for that.  I know of many who just can't get better limits because they are actively seeking credit.  When I read my own myFICO break down of my current credit situation, it explicitly stated that seeking credit isn't a characteristic of those with the best scores and highest limits. What's your take on this?  Just curious.

OP- Sorry for the thread highjacking!  

To the OP:  I believe how much an inq affects your score depends on where you are in your credit journey.  Those with highest scores and long AAoA experience harder hits with new inqs then those starting out.  I know when I first started out, an inq only cost me a few points.  My last inq was worth 11 points!  I couldn't believe it.  When the new account reported:  no change to score.  Weird.  I expected it to be the other way around.  YMMV though as usual.

[rootpooty]

i opened a new cc with nfcu and with the inquiry and new account reporting my eq score dropped 7 pts. no biggie ill get it back in no time