How much of an impact would a new cc have?

Swatch · ‎04-09-2022

I repaired my credit, and may not apply for a mortgage for 9+ months.

However, opening a new account or two could help me save/earn some money. I am curious roughly how many points I would lose if I have 1 newly opened cc (in the 6 or 12 months before I apply) versus none?

In my case, I think it might not affect my score more? The reason is that I will have 2-3 newly opened student loans in the 12 months before I apply, so that already changes my AoYA and AAoA?

Perhaps more importantly, I may want to open an SSL and pay it way down.

(My AAoA will still be around 2.5 years even with the new accounts factored in because I have some old accounts.)

I do AZEO.

dragontears · ‎04-09-2022

@Swatch wrote:
I repaired my credit, and may not apply for a mortgage for 9+ months.

However, opening a new account or two could help me save/earn some money. I am curious roughly how many points I would lose if I have 1 newly opened cc (in the 6 or 12 months before I apply) versus none?
In my case, I think it might not affect my score more? The reason is that I will have 2-3 newly opened student loans in the 12 months before I apply, so that already changes my AoYA and AAoA?

Perhaps more importantly, I may want to open an SSL and pay it way down.

(My AAoA will still be around 2.5 years even with the new accounts factored in because I have some old accounts.)

If you have student loans a SSL will not help your FICO 8/9 scores.

The affect on your mortgage scores of opening a new account can be profile dependent. I typically loose 15-20 points on my mortgage scores when I open a new account but I am sure that our profiles are very different.

Swatch · ‎04-09-2022

@dragontears wrote:
If you have student loans a SSL will not help your FICO 8/9 scores.

It seems like having one paid down to 8% would help.

@dragontears wrote:
The affect on your mortgage scores of opening a new account can be profile dependent. I typically loose 15-20 points on my mortgage scores when I open a new account but I am sure that our profiles are very different.

Oh, 15-20 is a lot. But I think that the newer student loans would probably dinging me half that already? Yeah, so many factors. I think I was told that the score simulators aren't reliable.

I do AZEO.

disdreamin · ‎04-09-2022

@Swatch wrote:
@dragontears wrote:
If you have student loans a SSL will not help your FICO 8/9 scores.
It seems like having one paid down to 8% would help.

I thought with installment loans it was the aggregate that counted, not each individual loan by itself. So, for example, if you've got two loans, one student loan that's at 90% of 10k borrowed and one secured loan at 9% of 1k borrowed, it's the total owed divided by the total initial amount that would be used, so 9090/11k which would be ~83% aggregate balance. I could be wrong on this, though, so hopefully someone more knowledgable will chime in.

[Edited to add: I saw someone in another thread saying that both individual and aggregate utilization count with installment loans, as they do with revolving credit. I was unaware of this, but it is definitely something I'm going to look into. Sorry if my info about wasn't correct]

Swatch · ‎04-11-2022

@disdreamin wrote:
I saw someone in another thread saying that both individual and aggregate utilization count with installment loans, as they do with revolving credit.

Oh, wow. I also think that some places would not count my student loans if they are deferred? Otherwise it seems like people who graduated less than a year ago could never get loans. Because they would typically have paid about 1-5% of their student loans, or sometimes nothing due to them deferred while they search for a job.

I do AZEO.

disdreamin · ‎04-12-2022

@Swatch wrote:
@disdreamin wrote:
I saw someone in another thread saying that both individual and aggregate utilization count with installment loans, as they do with revolving credit.
Oh, wow. I also think that some places would not count my student loans if they are deferred? Otherwise it seems like people who graduated less than a year ago could never get loans. Because they would typically have paid about 1-5% of their student loans, or sometimes nothing due to them deferred while they search for a job.

My comment quoted above was an attempt to address how loan balances impacted FICO scores, as I thought that was what you were asking about in your original post. I can't recall reading anywhere that student loans wouldn't count toward a FICO score if they are deferred. I thought they were factored into the FICO scoring algorithms whether they were in repayment or deferred since it is still legitimate debt owed, but it is possible that I am wrong about that.

If you are talking about deferred student loans counting in DTI calculations, that is an entirely separate thing and I have no firsthand knowledge of how that is determined. I think I've read things about 0.5% or 1% of the balance, but this is definitely not my wheelhouse.

That said, your posts are, I think, conflating FICO scoring impacts and DTI calculations.

Swatch · ‎04-14-2022

@disdreamin wrote:
I can't recall reading anywhere that student loans wouldn't count toward a FICO score if they are deferred. I thought they were factored into the FICO scoring algorithms whether they were in repayment or deferred since it is still legitimate debt owed, but it is possible that I am wrong about that.

If you are talking about deferred student loans counting in DTI calculations, that is an entirely separate thing and I have no firsthand knowledge of how that is determined. I think I've read things about 0.5% or 1% of the balance, but this is definitely not my wheelhouse.

Thanks.

I was only asking about FICO mortgage scoring and deferred student loans, but I wouldn't mind hearing about the other topics as well if anyone knows. I have read DTI and deferred loans before, but it's hard to remember all the important parts.

I do AZEO.