HELOC and -21 pt score change

[909]

Hello,

I'd like to share some information to see if this seems reasonable to y'all:

Experian FICO Score 8 was 826 (per myFICO): Credit Card Util 3% out of about $140K, no cards over 5%; Mortgage at about 85% Util (mortgage LTV = 31%); car loan at about 22% Util. All FICO 8s have been over 800 for over two years.

Today my new HELOC hit Experian and I received an alert for that and a 21 pt score drop to 805 (I understand alert reasons may have NOTHING to do with score changes, that said, I'm not aware of other notable shifts in my accounts at this time). The HELOC is for $210,000 with a $5,000 (2.3%) balance.

Is a 21 pt drop in FICO 8 expected for a new HELOC with the line and balance mentioned? I'm mostly curious and am sharing a data point if it's helpful.

Other key info such as account ages should be in my sig.

Thanks.

[Anonymous]

What was the age of your youngest account prior to HELOC reporting? If your AoYA was over 12 months, adding a new account and resetting AoYA to 0 will typically cost about 15-20 points alone.

[909]

AoYA before the new HELOC was 31 months. Now it is 0 or 1 month.

If that's worth 15-20 you may have explained this. Thank you!

I'm still open to their ideas.

(I guess it's also time to apply for any cards I might want such as a Chase Sapphire.)

Thanks.

[Anonymous]

Keep in mind that your AAoA will also drop but judging by your $140K TCL and AAoA of 5+, your profile should be thick enough to absorb the new account with minimal effect, it would be no more than a few points even if it drops under 5, the main culprit here is definitely AoYA.

[RonM21]

Just as a data point for a credit card...I had a new account report on Experian the other day and my score dropped from 783 to 761. My AAoA was showing as 5 years 4 months.

[909]

This just in, Transunion dropped 23 pts and Equifax dropped 16 pts. Both from this new HELOC.

This is all fine, I just didn't know what to expect and didn't think the hit would come from AoYA. It's been awhile since I've seen that.

[Thomas_Thumb]

As said above, drop is associated with the new account droppong AoYA from over 12 months to zero.. One point of interest is various posters have stated seeing a point gain after a new account shows activity and subsequently ages to 3 months or 6 months - assuming no additional new accounts are added. Others such as OM don't see anything until 12 months. I do believe young/thin files may respond to new accounts differently than thicker files having an AoOA of 10 years or more. You may want to monitor AoYA aging yourself.

My newest account is approaching 7 years age so I don't have any personal data to share on new account aging vs score.