Transunion Credit Karma Score Drops of 44 points

[Anonymous]

I recently opened a considerable number of new credit card.  Today 1 inquiry and 4 accounts hit my Transunion report and it dropped 44 points.  Is this common?  How long does it take to rebound.  Only other thing that showed was around $300 in balances total on several cards.  Utilization is under 10% over all. 

[Thomas_Thumb]

VantageScore 3.0 does punish score for opening "too many" revolving credit accounts in a short period of time. How many is too many? I'd say 3 or more. What is a short period of time? Certainly 30 days, perhaps 45 days.

VantageScore graphs indicate negative impact of new accounts (excluding inquiries and AAoA) should disappear in 90 days.I'd estimate 24 to 29 points of your total drop were "too many new accounts" related. The remaining 15 to 20 points may require more time to recover as AAoA takes a while to build and VS3 looks at inquiries for 2 years.

Best to view the above score drop breakdown as a guestimate - coiuld be off considerably.

Note: Impact on score associated with "too many accounts opened recently" is dependent on how many open accounts you had before. If you had one or 2 impact will be more severe relative to someone who had 6 to 10 cards open. It does not appear that closed CC accounts or file thickness buffer the impact.

[Anonymous]

Credit Karma and "FICO" scoring can't be used in the same sentence.

[Thomas_Thumb]

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@Anonymous wrote:

Credit Karma and "FICO" scoring can't be used in the same sentence.

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I think you just did - and the 1st poster to do so in this thread.

[Anonymous]

These things happen.

[sjt]

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@Thomas_Thumb wrote:

VantageScore 3.0 does punish score for opening "too many" revolving credit accounts in a short period of time. How many is too many? I'd say 3 or more. What is a short period of time? Certainly 30 days, perhaps 45 days.

VantageScore graphs indicate negative impact of new accounts (excluding inquiries and AAoA) should disappear in 90 days.I'd estimate 24 to 29 points of your total drop were "too many new accounts" related. The remaining 15 to 20 points may require more time to recover as AAoA takes a while to build and VS3 looks at inquiries for 2 years.

Best to view the above score drop breakdown as a guestimate - coiuld be off considerably.

Note: Impact on score associated with "too many accounts opened recently" is dependent on how many open accounts you had before. If you had one or 2 impact will be more severe relative to someone who had 6 to 10 cards open. It does not appear that closed CC accounts or file thickness buffer the impact.

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This is great information! Thanks!

I noticed my friend's Vantage 3.0 score dropped when they paid down debt and brought their utilization from around 70 plus % to 8%. Why did this happen?

[Anonymous]

The score wouldn't have dropped due to cutting utilization from 70% to 8%.  If it dropped, it dropped due to another factor outside of utilization.

[sjt]

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@Anonymous wrote:

The score wouldn't have dropped due to cutting utilization from 70% to 8%.  If it dropped, it dropped due to another factor outside of utilization.

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We looked at the credit report in detail and the only change was the decrease in utiliztion.

[Anonymous]

Then it's a fluke.  It's literally impossible for a drop in utilization to result in a lower score, unless that drop is to 0% aggregate utilization which was not the case in your example.

[Anonymous]

Hum, AAofA could definitely be a factor.