How long for scores to rebound?

[disdreamin]

I've done a bit of damage to my FICO scores over the past year or so - I added two new credit cards, a new auto loan, and had a couple inquiries that did not result in anything new on my reports. My FICO 8 scores have dropped about 30-40 points due to those changes.

I'm curious if there is a way to predict how long it will take my scores to rebound back to where they were. I know as inquiries drop off that will help, and I'm assuming when the auto loan gets under 10% that should be another step toward it as well. The irony is that when the auto loan gets under 10% it will only be a few payments away from finished, so that boost won't last long.

I'm not concerned about my scores, this is simply curiosity. I tried searching but didn't come up with a match with the keywords I used. If there are threads about this that I missed, I'd appreciate links to them.

[SouthJamaica]

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@disdreamin wrote:

I've done a bit of damage to my FICO scores over the past year or so - I added two new credit cards, a new auto loan, and had a couple inquiries that did not result in anything new on my reports. My FICO 8 scores have dropped about 30-40 points due to those changes.

I'm curious if there is a way to predict how long it will take my scores to rebound back to where they were. I know as inquiries drop off that will help, and I'm assuming when the auto loan gets under 10% that should be another step toward it as well. The irony is that when the auto loan gets under 10% it will only be a few payments away from finished, so that boost won't last long.

I'm not concerned about my scores, this is simply curiosity. I tried searching but didn't come up with a match with the keywords I used. If there are threads about this that I missed, I'd appreciate links to them.

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It depends on too many different factors to give you a blended rule.

1. Whenever you open a new account, it resets your age of youngest account (AoYA). That sets you back to a lower scorecard if you didn't have any new accounts during the prior 12 months. When 12 months pass, you get back the points you lost from that. It also appears that you get some points back at 3 months and 6 months on that factor.

2. Whenever you open a new account your Average Age of Accounts is reduced. Whatever you may have lost from that comes back slowly.

3. Inquiries usually don't cost a lot of points, but what points you lose come back after 12 months.

4. As you already seem to know, if the car loan is your only open loan, you won't get the nice FICO 8/9 score bump there until you're below 10% aggregate installment utilization.

[disdreamin]

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@SouthJamaica wrote:

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It depends on too many different factors to give you a blended rule.

<snip>

2. Whenever you open a new account your Average Age of Accounts is reduced. Whatever you may have lost from that comes back slowly.

3. Inquiries usually don't cost a lot of points, but what points you lose come back after 12 months.

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I completely understand there isn't a solid answer/rule. I have to be honest, I didn't realize AoYA was a thing - it's a TIL day. I'll keep an eye on scores as the new accounts age - one cc is already coming up on a year old next month, I think.

My AAoA is pretty well padded with a few very old active accounts, as well as a bunch of older closed accounts, so it's truly difficult to drop it too much.

Inquiries did appear to cost me points, but it seems I am wrong with that. My score is considerably higher related to the report showing no inquiries, and lowest on the one showing the most. It will be interesting to see if my scores improve and start to align once those different number of inquiries age off.

And yeah, sadly I know the auto loan will only help once it's under a certain threshold and then only for a very limited amount of time. It should hit 50% in about a month, but I don't expect to have it open past this summer, so I'll be back to not getting that nice boost for it being almost paid off (I figure I'll get under 10% straight to PIF/closed within a month or two over the summer).

[FireMedic1]

Everything rebounds. You cashed in some points to get 2 cards and a car. Great!!!!!!!! Why get down on yourself. Thats how building a profile works. I was 750's. Cash them in for Home Dept, Loews, PENFED, and a new SUV. Well worth 30 points. Points get you what you want. They return and then go for more. Its a numbers game. Start that car and smile. Hey look what I got! Dont let points get you down on the new goodies you got for those points. Be happy!

[disdreamin]

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@FireMedic1 wrote:

Everything rebounds. You cashed in some points to get 2 cards and a car. Great!!!!!!!! Why get down on yourself. Thats how building a profile works. I was 750's. Cash them in for Home Dept, Loews, PENFED, and a new SUV. Well worth 30 points. Points get you what you want. They return and then go for more. Its a numbers game. Start that car and smile. Hey look what I got! Dont let points get you down on the new goodies you got for those points. Be happy!

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I'm not at all upset with the points drop, just curious what the rebound process will probably look like. I'm not at all down on myself, and I didn't intend to give that impression in my post.

I'm laughing a bit because maybe I would be happier with the points trade-off if I DID have the new car to show for it, but what the points actually got me were one card for me and a couple things for my oldest kid (car and co-signed cc). Not upset at the trade-off, and grateful I can help my kids get their adult life started on the right foot.

[W261w261]

Just a gentle reminder (as the father of 3) that kids make mistakes. If I were you, I'd watch anything that I had co-signed very closely. Remember Regan "Trust but Verify."

[disdreamin]

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@W261w261 wrote:

Just a gentle reminder (as the father of 3) that kids make mistakes. If I were you, I'd watch anything that I had co-signed very closely.

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Thank you for the concern. The account shows up on my CU banking app so I can monitor and pay it. It's also only got a $1k limit, so there isn't too much trouble that is possible unless they significantly increase his CL. Before that happens, I expect him to reapply to have the card in his own name only (we inquired and this is something they can do once he has sufficient income).

Frankly, I'd rather have the ability to assist him with making sure his cc bill is getting paid, to get him started on the right foot with establishing credit. I have access to his savings account (it is a joint account with me) and can use money from there to pay his bill if necessary.

For what it's worth, he and his sibling  have been additional cardholders on my AmEx for a number of years. They have proven to be extremely responsible, and my oldest in particular is about as conservative with spending as it is possible to be. It has at times been a topic of dissent since he feels some expenditures we've made were unecessary and/or frivolous. It's almost comical, given how conservative we feel we are with large expenditures.

[W261w261]

sounds good.  My concern would be a missed payment, which would follow you around for awhile.

[disdreamin]

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@W261w261 wrote:

sounds good.  My concern would be a missed payment, which would follow you around for awhile.

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Mine too, which is why the only reason I was willing to co-sign was that it would show up in my portal and could not be removed unless I was removed as a responsible party. I pay bills every two weeks and my SO has a card with the same institution that I take care of paying, so the likelihood is there won't be an issue. I still need to figure out auto-pay for those accounts though, I wish the CU's online presence was a sleek as the big companies (Chase, AmEx, etc.).

[W261w261]

If I understand you correctly, your child(ren) pay their part of the bill. So, in a case where you charged nothing on your account, but they charged something, you depend on them to take care of it. If they don't do their part for whatever reason (non-payment, bounced payment etc), there might be a late charge, but you'll have plenty of time to catch it before the next cycle bills. That next cycle unpaid is the one that reports.