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New Credit Card Score Activity

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New Credit Card Score Activity

Hey guys, so I recently applied for my last 3 credit cards last month, I got the amex cashback for 2k, the amazon prime sig for 6.3k, and then I got the citi double cash for 500 on the 1st of this month. I assumed this would push my limits up and lower my utilization. I am also paying down all of my previous card debt  to 1% utilization. Since applying for the first two in Oct, the only one that has reported was Citi, and it dropped my score 7 points across each bureau. 

 

My questions, once the other to cards finally decide to report, would it be safe to assume another 14 points will drop from my scores, will the higher limits of those cards fight against those point drops, and which is better to pay off from a credit score increase perspective, a vehicle installment loan (3.8k) or a revolving card balance (2.9k). I am aware of paying off the one with the higher interest to save money, but I want to know which will boost the score better.

 

The purpose of all of this is to be able to purchase a house in 4-5 months, thank you all who can help in advance.

FICOs: EQ - 731 / TU - 737 / EX - 727
Garden: 6/1/19 / U 6%
Profile: Aaoa - 4.6y / Aooa - 13y / Aoya - 1m
Wallet:
"An investment in knowledge pays the best interest." - BF
13 REPLIES 13
Super Contributor

Re: New Credit Card Score Activity

1) Paying off the car loan to zero, if that is your only installment loan, will really hurt your score. Best to leave that one on the payment plan. See the Understanding FICO Scoring forum for common headlines “I paid off my car loan and score dropped 30 / 40 / 50 points !!!”

2) Paying a card down to a lower utilization is always good for your Scott, just be certain at least one revolver reports at least some small balance.
High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 2 of 14
Valued Contributor

Re: New Credit Card Score Activity

*It is highly recommended that one avoid applying for new credit within 6 mos of seeking a mortgage.*

The CITI $500CL probably wasn't enough to put a dent in your util and offset the new account penalty, so yes, you saw the full scoring impact from the drop in your AAoA. When the other two report, the lowered util resulting from those combined CLs may offset the additional drops in AAoA a bit so you may not see as much of a decrease in score.

If your auto loan is your only installment, you don't want to pay it off in full too soon. Lack of an open installment loan will drop your score because it affects your 'credit mix'. Your best bet is to continue paying down your credit cards to improve your scores. Prior to applying for your mortgage, make sure you have only one card reporting a small balance of less than 8.9% of its limit, and all other cards reporting at zero (research AZEO if you are not already familiar) to get the highest possible boost in your mortgage scores.
Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 07/01/2019: EX 741 ✦ EQ 727 ✦ TU 733
Current FICO 9s | 06/01/2019: EX 753 ✦ EQ 751 ✦ TU 732
Highest FICO-8 Ever | 10/2018: 780 [on dirty report]

2019 Goal Score | 780s


My AAOA: 2.7 years not incl. AU / 2.10 years incl. AU
My AoOA: 6.5 years not incl. AU / 8.5 years incl. AU
Report Status: Clean

Tending my Garden til 2/2021


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 3 of 14
Super Contributor

Re: New Credit Card Score Activity

Nice response by NRB and TMR.

 

Opening a number of new cards was a mistake given that you plan to buy a house soon.  There is no changing that, however, so the best thing to do is get all cards reporting zero except one (AZEO) with the remaining card reporting a small positive balance (e.g. $20).

 

Once the new AZEO balances have appeared on all three reports (you can use some free tools to monitor that) then you should sign up for the myFICO Ultimate and take a look at your mortgage scores.  These are different from your FICO 8 scores.

 

PS.  Do be sure to make one purchase on each of the new cards -- although it's fine if the card still reports $0.  When a new card remains unused for a while it sharply increases the chance that it will be closed due to inactivity.

 

Message 4 of 14
New Contributor

Re: New Credit Card Score Activity

Follow up from something i just read "dont apply for new credit within 6 months of mortgage..."

 

Do high FICO scores, Zero Baddies, low UTIL, and 1-2 inquiries defy that logic in general? or does the rule of thumb overrule any extenuiating circumstances?

 

why i ask, i am looking to buy a house next summer as well. i have one recent inquiry, but looking to add a second (CC), only if the impact is minimal.

 

As i said, no baddies, low to no util, currently one inquiry, scores in sig (mortgage scores: 784/809/811). I have student loans and one auto loan. 

 

Rick

FICO 8:
EQ-835
TU-836
EX-833
Discover IT - 23.5k @18.24%
Macys Amex - 7.5k @26.99%
Chase Amazon - 2k @21.49%
Chase Sapphire Preferred - 14.7k @17.24%
Amex Gold (NPSL)
Message 5 of 14
Valued Contributor

Re: New Credit Card Score Activity


@Rickd21 wrote:

Follow up from something i just read "dont apply for new credit within 6 months of mortgage..."

 

Do high FICO scores, Zero Baddies, low UTIL, and 1-2 inquiries defy that logic in general? or does the rule of thumb overrule any extenuiating circumstances?

 

why i ask, i am looking to buy a house next summer as well. i have one recent inquiry, but looking to add a second (CC), only if the impact is minimal.

 

As i said, no baddies, low to no util, currently one inquiry, scores in sig (mortgage scores: 784/809/811). I have student loans and one auto loan. 

 

Rick


It's certainly a profile-specific thing --  but it's generally the rule of thumb to ensure you are able to obtain the best possible mortgage offer (lowest rates) for your credit profile.  Any ding to your scores, even a minor 5 point ding, can take you from the lowest interest rate tier to the second lowest or worse.  The mortgage FICO models also weigh 'credit seeking behavior' quite heavily, so the score reduction could be more than expected.  Of course, if your scores are already in the 800+ realm, and you have a lengthy AAoA on a clean report, this reduction may not affect your mortgage interest rate offer at all.  But - the addition of new accounts will prevent your scores from increasing a bit more (likely due to aging factors) over the next few months prior to your applying for a mortgage.  If I were you, I'd err on the side of caution just wait till after the mortgage was secured before adding new credit into the mix because i'd much rather end up with the best possible mortgage offer than a new credit card. 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 07/01/2019: EX 741 ✦ EQ 727 ✦ TU 733
Current FICO 9s | 06/01/2019: EX 753 ✦ EQ 751 ✦ TU 732
Highest FICO-8 Ever | 10/2018: 780 [on dirty report]

2019 Goal Score | 780s


My AAOA: 2.7 years not incl. AU / 2.10 years incl. AU
My AoOA: 6.5 years not incl. AU / 8.5 years incl. AU
Report Status: Clean

Tending my Garden til 2/2021


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 6 of 14
Super Contributor

Re: New Credit Card Score Activity


@Rickd21 wrote:

Follow up from something i just read "dont apply for new credit within 6 months of mortgage..."

 

Do high FICO scores, Zero Baddies, low UTIL, and 1-2 inquiries defy that logic in general? or does the rule of thumb overrule any extenuiating circumstances?


What is the age of your youngest account?  That turns out to be important in advising you.  If your Age of Youngest is currently greater than 12 months I would avoid adding any cards until after you own the house.

 

PS.  We recommend that you not give people your first (or last) name in these posts, just to protect you from Identity Theft and so forth.

Message 7 of 14
New Contributor

Re: New Credit Card Score Activity

Thanks for both responses. Great advice, I will heed your suggestions and NOT apply for the new CC. 

 

Avg age of all accts is somewhere between 7-8 years.

 

age of youngest acct is ~1m, and probably has not factored into the formula above. 

 

I will be house hunting in the july/august range, and was figuring i could age the accts between now and then. But, why risk it. As of 1/14/19, i will only have one inquiry in general showing up on my CRAs. Which will be the one acct i just opened 1m ago.

 

P.S. thanks for the tip, i guess being polite is not as valuable anymore when idenity theft weighs in!

FICO 8:
EQ-835
TU-836
EX-833
Discover IT - 23.5k @18.24%
Macys Amex - 7.5k @26.99%
Chase Amazon - 2k @21.49%
Chase Sapphire Preferred - 14.7k @17.24%
Amex Gold (NPSL)
Message 8 of 14
Super Contributor

Re: New Credit Card Score Activity

If your AoYA is under 2 months, then I'd consider adding the card now.  How many accounts do you have currently?  (How many closed and how many open?)

 

Of the four cards in your signature, how many were on your reports prior to you pulling your mortgage scores?

Message 9 of 14
New Contributor

Re: New Credit Card Score Activity

on the MyFico report from last week. 9 installment loans, unsure if that includes both open+closed. 4 revolvers. 

 

avg age is 100 months prior to the new acct being added last month (i dont think its reporting yet)

 

only 3 I THINK. I cant fully figure that part out. The logic doesnt make sense to me. 

 

As it shows 4 revolvers, but the AAOA did not appear to drop. 

FICO 8:
EQ-835
TU-836
EX-833
Discover IT - 23.5k @18.24%
Macys Amex - 7.5k @26.99%
Chase Amazon - 2k @21.49%
Chase Sapphire Preferred - 14.7k @17.24%
Amex Gold (NPSL)
Message 10 of 14
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