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Hi Friends,
Well, I fear I made a bit of an error a couple of weeks ago, costing me 9 points on Experian FICO 8 (not sure how other CRB's and models are impacted yet). My wife and I fell out of the garden and decided to apply for the Citi Costo Card. We had her apply so that she would get the inquiry and I would go on as an AU. The good news is that we were approved with a CL of $10,500, however as soon as the new account hit my Experian report, my FICO 8 dropped from 740 to 731. I am pretty sure that it has little or noting to do with the AAoA, as I was sitting at 13.7 years AAoA and this one account would have little impact on that (likely still over 13 years). I assume that the drop is just because a new revolving account was added.
I assume the points will come back as we continue to show perfect payment history and near-nothing Util, however I am just wondering how long it may be. Is it possible to get a few points back here and there over the next couple of months, or could it take a year or so?
On the good side, my major baddies (a foreclusre and a CC settlement) are scheduled to completely fall off around the third quarter of this year, so I should see quite a few points then.
Thanks for any input in regard to this new account whacking us the 9 points.
The score drop was likely due to the new account and AoYA drop to 0 months. How long were you in the garden for, meaning what was your AoYA prior to this account landing on your credit report? If it was 1 year or older, this no doubt is the cause for your score drop. Most people reference recovering from a new account within 6 months or so. If your AoYA was 1 year or greater, you can be sure that in 1 year you'll be back into the same place you were. While it may take you 6 months or a year to get back those particular 9 points, your scores will continue to grow regardless over that same period for other reasons, no doubt masking that minor loss in the process.
Yeah, it's just a blip on the radar and nothing to sweat.
An AoYA drop from 13 months to 0 months is significant, so 9 points is understandable. Had you just opened a new account say 2 months ago and your AoYA drop was from 2 months to 0 months, you likely wouldn't have experienced much if any drop at all since you would have already been seeing the penalty associated with recently opening an account.
My guess is that in 3-4 months your score will be back to where it was pre-app and that within 6-8 months you'll be in the green by 5 points or so.
@Anonymouswrote:
An AoYA drop from 13 months to 0 months is significant, so 9 points is understandable. Had you just opened a new account say 2 months ago and your AoYA drop was from 2 months to 0 months, you likely wouldn't have experienced much if any drop at all since you would have already been seeing the penalty associated with recently opening an account.
Would you expect a much larger score drop from taking my AoYA from 40+ months to 0 months or is it all the same above 12 months?
EW800, I hope I don't derail your thread too much and I agree with BBS about the drop being mostly due to AoYA.
From what I understand, an AoYA drop from anything above 24 months is equal, as FICO no longer considers an account "new" after 24 months at most. Many people see these negative reason codes relating to a new account go away after 12 months, but some have reported them for up to 24 months. I sort of personally doubt that they have any adverse impact on score after 12 months though, similar to how inquiries are present for 2 years on your credit report, but only adversely impact score for 1 year.
@Anonymouswrote:
@Anonymouswrote:
EW800, I hope I don't derail your thread too much and I agree with BBS about the drop being mostly due to AoYA.
No issue at all. It is an interesting and educational topic, so I welcome any and all questions and responses.
BBS, as always, thank you!
When my AoYA crossed the 3 month threshold, I gained 10-12 points across all 3 CRAs. So I'd say after 3 months you'll be right back where you started.
@arkanewrote:When my AoYA crossed the 3 month threshold, I gained 10-12 points across all 3 CRAs. So I'd say after 3 months you'll be right back where you started.
Thank you!