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Big drop in FICO Score After Getting AMEX

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Re: Big drop in FICO Score After Getting AMEX

Yeah just add up age of all the accounts you have on your credit report, whether they are open or closed and divide that number by the total number of accounts you just added up.  So if you added up 9 accounts that totaled 52.3 years, your AAoA would be 5.8 years as an example.


And yes, to answer your question your AAoA will go down a bit more once the Amex shows up on your report.  Do the math though to see what the impact will be.


Using the above numbers as an example, the 9 accounts simply becomes 10 but the number of years of 52.3 remains the same.  Therefore AAoA drops to 5.2.  Under FICO scoring, the decimals don't matter; it goes off the first whole number so in this example AAoA is 5 years regardless of the new account being added.  It will simply take a little longer to get to 6 years now, but there wouldn't be any score impact due to the AAoA reduction in this example.


Message 11 of 14
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Re: Big drop in FICO Score After Getting AMEX

So now does that mean it is going to to take X number of years to get back to where I was just before I applied?  


I didn't do the math yet for the AAoA, I will do that a little later and report back.


As an example, let's say my score was 713 and an AAoA of 5, and now because of the 3 additional cards it is down to 660 and an AAoA of 3.  Given on time payments, and no new credit, does that mean it is going to take at least 2 more years to get back up to a score of 713?


If that's the case it definitely was not worth getting the cards and I just shot myself in the foot.

Message 12 of 14
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Re: Big drop in FICO Score After Getting AMEX

It wouldn't take you the full 2 years in that example to "get back" to the original score you had.  Your score drop could have been from two factors.  One, the AAoA reduction but two, the additional inquiries.  Inquiries don't impact your score for more than 1 year (even though they are visible on your file for 2 years) so 1 year down the road assuming no more inquries you'd get those points back, and in that year your AAoA of course grows to 4 years (again, in this example) so 1 year down the road your AAoA is only 1 year younger than when you started.  Of course during that year if you have no late payments across all those accounts, PIF every month etc. you are adding additional positive value to your FICO scores... positive value that IMO would yield greater points than the 1 year reduction in AAoA.  My guess is assuming you have a positive credit history for the next 12 months your score 1 year from now when the inquiries fall off will be greater than it was before you got the new cards.

Message 13 of 14
Established Member

Re: Big drop in FICO Score After Getting AMEX

Another possible reason for the large drop is your utilization. I don’t believe I saw it mentioned but depending on the cost of that shiny new computer and the CL on the new Barclay’s you could have "maxed out" the card which will hurt quite a bit more than a couple of inquiries and new accounts. The great part about this sort of drop though is it goes away as soon as you pay it down. From what I have learned here, Utility has no memory, meaning that as you pay it down your score will come back up. The biggest jumps likely around the 30% and 10% marks. The more you pay off at once, the bigger jumps you will see.


No matter what caused it, they will come back up and your profile will be that much stronger because of it.

12/15 starting out | Scores 717,735,734 | 40% Util | CL Chase 4k, Paypal 3k, Carecredit 3k
3/1/16 Getting going |Scores 758,749,782 | 1% Util | Chase Amazon 4k, Paypal 3k, Carecredit 9600, Freedom 8k, BCP 10k, Barclay Ring 7500, IT 10k
8/1/16 CLI updates |Scores 754, 759,772 |Paypal 4k, BCP 30k, IT13.5k, Carecredit 10k
1/3/17 CLI AmEx 38K, IT 22K, scores 763, 778, 791
Message 14 of 14
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