How long does it take your score to recover from adding new credit cards?

[Anonymous]

I've been helping my boyfriend clean up his credit.  He had about $26,000 in child support and tax lien debt when we started.  I got the tax liens released and made settlement agreements on the child support arrears, and now, 5 months later, he owes $0!  Yay!  I also got him a couple of new credit cards in December 2011 because he had no revolving credit when we started.  His score has bounced up and down between 580 and 650.  Today, the $0 debt has finally shown up and his Equifax score is 645.  The only thing hurting it according to Equifax is the new accounts.  Assuming he continues to have an extremely low utilization rate each month, how long before the new accounts stop hurting his score?

[pizzadude]

Congrats on the rebuilding progress ~ that is great to be down to $0 !

What is likely happening is that his average age of accounts ( AAoA ) has been lowered as he opened new accounts.    The only way that this improves is over the course of time, as positive payment history is reported.     What does his AAoA show now, and do you have any idea what his AAoA was before he opened the new CCs ?

[Anonymous]

Wow, you guys respond fast!  I love it!

AAoA now:  6 years, 8 months

AAoA before he opened new CCs:  8 years, 8 months

[Guava]

New inquiry dings you a couple of points, and lowering your AAoA dings you also. New inquiries stop hurting after a year. Unfortunately there's no way to recover the loss from losing AAoA, but if you have sufficient amount of older accounts, it'll soften the blow   Pay your bill timely and let them age! Overtime you'll be in great shape!

[Anonymous]

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@Anonymous wrote:

Wow, you guys respond fast!  I love it!

AAoA now:  6 years, 8 months

AAoA before he opened new CCs:  8 years, 8 months

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6 years, 8 months is actually quite high AAoA. Are there any other negatives reporting that could be affecting his credit history, e.g. chargeoff from a credit card long time ago? I know you mentioned no but just making sure. If the only thing is insufficient credit card history, the score should quickly rise (700+) after about 6 months of responsible usage.

[Anonymous]

A year...bummer, I was hoping it would be sooner.  Oh well.  It's still awesome to be out of debt.  Thanks for your replies.

[learnin113]

AGE (TIME) No other way to speed up the process if your UTI is low as you say.

[Anonymous]

He has lots of negative stuff from the past on his report including a 2004 bankruptcy, and the other three things I mentioned, but everything has been discharged or paid off now.  I think you're right and that his score will quickly go up over the next 6 months.  His utilization currently shows as 18% but we plan on lowering that.  These dramatic debt payoffs JUST showed up on his report today.  Here is his Equifax score history since we started:

7/29/2011:641 (before I did anything and he had child support arrears, tax liens and a couple collections)

8/31/2011:637 (after we paid collections off and disputed some things)

9/30/2011:642 (started paying down child support)

10/21/2011:621 (disputed several fraudulent entries that were eventually removed)

11/30/2011:621 

12/31/2011:658 (got one new credit card and his score actually went up)

1/31/2012:581 (Equifax received my letter reporting that we had paid off everything (child support and tax liens).  We also disputed another fraudulent entry.  This put just about everything on his report was under dispute.  I am guessing this is why his score dove, because it made it look temporarily like he had no credit at all.

2/8/2012:643 Major jump back up again when disputes were settled and debt wiped clean.  I looked at credit summary, which reported excellent payment history, excellent mix of accounts, and the only negatives were his recently opened accounts

[vanillabean]

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@Anonymous wrote:

how long before the new accounts stop hurting his score?

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Most of the new credit impact will be gone by May.

How about him as an authorized user on one of your cards?

[Anonymous]

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@Anonymous wrote:

He has lots of negative stuff from the past on his report including a 2004 bankruptcy, and the other three things I mentioned, but everything has been discharged or paid off now.  I think you're right and that his score will quickly go up over the next 6 months.  His utilization currently shows as 18% but we plan on lowering that.  These dramatic debt payoffs JUST showed up on his report today.  Here is his Equifax score history since we started:

7/29/2011:641 (before I did anything and he had child support arrears, tax liens and a couple collections)

8/31/2011:637 (after we paid collections off and disputed some things)

9/30/2011:642 (started paying down child support)

10/21/2011:621 (disputed several fraudulent entries that were eventually removed)

11/30/2011:621 

12/31/2011:658 (got one new credit card and his score actually went up)

1/31/2012:581 (Equifax received my letter reporting that we had paid off everything (child support and tax liens).  We also disputed another fraudulent entry.  This put just about everything on his report was under dispute.  I am guessing this is why his score dove, because it made it look temporarily like he had no credit at all.

2/8/2012:643 Major jump back up again when disputes were settled and debt wiped clean.  I looked at credit summary, which reported excellent payment history, excellent mix of accounts, and the only negatives were his recently opened accounts

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Negatives will report for 10 years even after they have been taken care of. So the BK from 2004 should drop off the reports in 2014, etc. The only thing you can do, unfortunately, is wait for this to happen. It's commendable though that you are taking the right steps to correct his credit!