FICO 8 weirdness

[Anonymous]

So, my experian dropped 12 points today; the only difference is that my new Navy Fed cc reported (first time). Will the AAOA decrease cause such a large drop? With this acct reporting, my total credit line increased, and my utilization decreased, so I was actually loooking for a slight score increase when this acct. reported.

Anyone got ideas?

[Anonymous]

What was your AAoA before the new account and what is it now, after?

Total credit limits have no bearing on score; someone with $100k in total limits doesn't possess any scoring advantage over someone with $1k in total limits, for example.

Utilization decreasing will only impact score if a threshold is crossed.  What was your overall utilization before/after?  If it didn't cross 8.9%, 28.9%, 48.9%, 68.9% or 88.9% you more than likely would see no scoring change.

A 12 point drop from adding a new account sounds pretty reasonable to me.  In addition to the AAoA drop, you likely also took an inquiry which very well could have contributed to that score drop as well depending on the bureau where the inquiry was taken and the bureau data that's being used for your score.  Also, when you say your "Experian" dropped, are you referring to your EX FICO 8 score?

[Anonymous]

There are at least two ways a new account can hurt your score:

(1)  It lowers your AAoA (Average Age of Accounts)

(2)  It lowers your AoYA (Age of Youngest Account) to zero.

In the case of #2, if your youngest account was previously > 12 months old, that could involve a significant score hit.  It could even cause you to be moved to a new scorecard.

If a new account also involves an inquiry that can also involve a scoring hit.

Finally the new account increases the percentage of accounts that are new, which is a scoring factor different from the others I have mentioned.  (The ideal percentage is 0% new accounts.)

[Anonymous]

Hey CGID.  Just a hunch here, but I'm thinking that the OP's AoYA was < 12 months when this new account reported, otherwise he'd likely have seen a greater score drop.  While I know nothing of the OPs file really, just from looking at his cards/limits I get the impression that his file is on the younger side.  I'd think that the AAoA and/or inquiry resulting in a 12 point drop makes pretty good sense, where if his AoYA was dropping from > 12 months to 0 months he'd probably see a larger score drop, say, 20 points.  I would like to hear from the OP about this more though, as it's just educated guesses on my part at this point.

[Anonymous]

No thresholds crossed; AAoA was already low - 1.2 yrs.  Utilization dropped from 24 to 20.

Yes, Experian Fico 8. Other two bureaus only dropped a few points each.

The inquiry hit over a month ago when I first got the Navy Fed approval.

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@Anonymous wrote:

What was your AAoA before the new account and what is it now, after?

Total credit limits have no bearing on score; someone with $100k in total limits doesn't possess any scoring advantage over someone with $1k in total limits, for example.

Utilization decreasing will only impact score if a threshold is crossed.  What was your overall utilization before/after?  If it didn't cross 8.9%, 28.9%, 48.9%, 68.9% or 88.9% you more than likely would see no scoring change.

A 12 point drop from adding a new account sounds pretty reasonable to me.  In addition to the AAoA drop, you likely also took an inquiry which very well could have contributed to that score drop as well depending on the bureau where the inquiry was taken and the bureau data that's being used for your score.  Also, when you say your "Experian" dropped, are you referring to your EX FICO 8 score?

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[Anonymous]

You are correct. Just started the rebuild 13 months ago. Everything is new. I've seen some progress, but now I'm curious how much more of a hit I'll take when I close my sub-prime card in August. That will be just before the one year mark for that one.

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@Anonymous wrote:

Hey CGID.  Just a hunch here, but I'm thinking that the OP's AoYA was < 12 months when this new account reported, otherwise he'd likely have seen a greater score drop.  While I know nothing of the OPs file really, just from looking at his cards/limits I get the impression that his file is on the younger side.  I'd think that the AAoA and/or inquiry resulting in a 12 point drop makes pretty good sense, where if his AoYA was dropping from > 12 months to 0 months he'd probably see a larger score drop, say, 20 points.  I would like to hear from the OP about this more though, as it's just educated guesses on my part at this point.

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[Anonymous]

You won't take any hit at all. Closing accounts has no bearing on FICO scores, as the closed account will remain on your CR usually for 10 years. The only thing that could indirectly impact score would be if closing the account raises your utilization across a threshold due to the now lower overall limits, but if your balances are pretty low already the likelihood of that happening is pretty small.