New AMEX card, NOW drop in FICO?

[tjolly05]

HI Everyone,

I just want to start off by saying that these forums are so very helpful. It's encouraging to hear everyone give advice, wherever they can.

So, I"ve had an excellent FICO score (755) up until Dec 2011, when I decided to open up a new credit card (AMEX). This would make it a total of three credit cards for me. And my total balance (on all three cards) is close to zero. I'm worried, however, b/c my credit score took a >10 point drop, and I'm very concerned that it may not go back up. It took me 3 years to get my score up 135 points and so naturally, I'm feeling anxious.

I know that AMEX is a charge, and not a credit card. However, with no pre-set limit, and no revolving credit label, I'm concerned that whatever I spend on my AMEX card will look like I "maxed" out my card, thus maybe keeping my FICO score down.

Is any of this true? Is there a certain spending limit range (eg. below $100) that I should keep my AMEX balance at in order to keep the "maxed" out appearance low?

I've tried to read through the forums concerning AMEX and FICO scores, but couldn't find a thread that answered my concerns.

Thanks for all of your help/advice!

[Guava]

With new FICO models, charge cards such as AMEX aren't a factor in utilization calculation, so your scores won't be affected in that regard. Also FICO does not track your past utilization ratios and score you on it. Say, if you're applying for an important loan next month, you can easily adjust your util this month and the impact on your score would be the same as you constantly adjusting it month after month. 

If you don't want the charge card to report high balance, pay it down or pay it off entirely at least 3 days before the statement date. Let the low balance or 0 balance reportd

Your score took a dip is due to new inquiries for your card and the drop in average age of accounts due to new cards reporting. The inquiries will stop affect your scores after a year. There's no way to recover from AAoA loss, just let your accounts age and make timely payment, overtime, you'll be in great shape.

[pizzadude]

+1. It is due to having a lower AAoA and probably due to the inquiry too ( at least on EX ). Where did you pull your score from and how much did it drop ?

[Anonymous]

I'm going to guess the drop comes from any (or all) of the following three:

• New inquiry
• New account opened
• AAOA decreased

Not much you can do about any of them.

[LS2982]

What you should do is use the card heavy initally and PIF before the the statement close date, that will report your highest bal but 0 bal.

[Anonymous]

IME Amex listed my highest REPORTED balance. I've run more than 3k on my card but because I paid the card prior to the report date I have a much lower high balance on my CR than I thought. So, Let 1 balance report (make sure its a good one) afterwards pay off 3 days prior to statement closure.