New Credit Card Time Period

[CreditMagic7]

I been trying for a couple of days now to find a topic (maybe not even on this board) that suggested that FICO views a new credit card account as more of a POSITIVE if within that first 90 days after activation some useage/activity is reported on it (assume a balance posts?) as opposed to if you decided to put your new Visa/MC/Amex bankcard(s) on the local back burner so-to-speak and they simply report (provided that lender does report w/o useage) a zero balance during that time.

Is there anything at all to this regarding new cards? IIRC it had something to do with at a particular point in the scorecard the new INQ/TL(s) ding begins to become regarded as something of a POSITIVE going on forward from there.

[Kidcat]

I'm interested in any thoughts/insight on this also.

[CreditMagic7]

Like so many others I'm working on trying to get a handle on some this from hands-on experience and also on-the-fly as bits and pieces of useful info become available since there are so many vectors that can and do affect the scale of FICO scoring. There's plenty of available evidence of just what and how deep/light a new credit card INQ and subsequent TL affects scores, but up until i caught wind of this did i didn't know there's a possibility of yet another data point on how to proceed with a new cc accnt for maximum benefit and flow going forward.

[Anonymous]

Hi CreditMagic.  You ask about two scenarios, both involving a new credit card, and I believe you are asking which course is most likely to benefit you.

(1)  The owner does not use it at all, possibly for many months.

(2)  The owner uses it at least a little bit during the first few months.

In my opinion it seems like #2 is a lot better, for the simple reason is that when you don't use ANY card for several months, whether it is new or not, you are putting it at some risk of being cancelled by the issuer.  I am guessing that the risk may be even higher when the card has never had even one single charge placed on it in the card's entire history.  I remember talking to a guy on this forum a few months ago about the subject of cards being cancelled for non-use. and his case involved him opening a card and then never using it (it was cancelled I think at month 8).

I realize you are also curious about whether there might be other kinds of benefit.  But my feeling is you only get to theorize about the speculative FICO benefit or not by first putting your card at risk of being cancelled (by opening it and then never using it for maybe a year) and I just don't think there's good grounds for doing that.  My feeling is that if you are going to go to the trouble of opening a new card, presumably you wanted it for something.  So use it a little and establish some payment history on it.  There's probably no easy way to prove that if you don't, there's a chance that it might hurt you in one way or another, but why not cover your bases and use it a little anyway?

[CreditMagic7]

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@Anonymous wrote:

Hi CreditMagic.  You ask about two scenarios, both involving a new credit card, and I believe you are asking which course is most likely to benefit you.

(1)  The owner does not use it at all, possibly for many months.

(2)  The owner uses it at least a little bit during the first few months.

In my opinion it seems like #2 is a lot better, for the simple reason is that when you don't use ANY card for several months, whether it is new or not, you are putting it at some risk of being cancelled by the issuer.  I am guessing that the risk may be even higher when the card has never had even one single charge placed on it in the card's entire history.  I remember talking to a guy on this forum a few months ago about the subject of cards being cancelled for non-use. and his case involved him opening a card and then never using it (it was cancelled I think at month 8).

I realize you are also curious about whether there might be other kinds of benefit.  But my feeling is you only get to theorize about the speculative FICO benefit or not by first putting your card at risk of being cancelled (by opening it and then never using it for maybe a year) and I just don't think there's good grounds for doing that.  My feeling is that if you are going to go to the trouble of opening a new card, presumably you wanted it for something.  So use it a little and establish some payment history on it.  There's probably no easy way to prove that if you don't, there's a chance that it might hurt you in one way or another, but why not cover your bases and use it a little anyway?

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Nope. This has no bearing on the RISK of card closures for non-use although that's true. Thanks for trying but you're off base a little.

Number 2 is a no brainer BUT, i am speaking of FICO new credit (in this case cc) scorecard formula where at exactly what point (or date) that new TL becomes considered a POSITIVE in FICO's calculations at 90 days proper (dings still fully enforce TL/INQ). I read someplace that in the first 90 days w/o any balance reporting it's still considered super new (Negative) but if useage applied and reported all 3 months then after 90 days a FICO (new credit) formula considers the TL a genuine POSITIVE and starts another clock (so-to-speak) towards history and thus begins another process to reduce that ding.

I dunno and i hope i'm not just reaching for straws here but i'll keep combing the web and also this forum to see if i can find that article which brought this to my attention in the first place.

[Anonymous]

I'll admit to not knowing for sure what you are asking.  Your first post seemed to draw a distinction between using a new credit card early on vs. not using it at all (putting it on the back burner).  So I was trying to respond to that.  But it sounds like maybe those are not the two scenarios?

You tried just now to clarify what you wanted to know by saying:

"i am speaking of FICO new credit (in this case cc) scorecard formula where at exactly what point (or date) that new TL becomes considered a POSITIVE in FICO's calculations at 90 days proper (dings still fully enforce TL/INQ)."

I apologize for being thickheaded but I can't make heads or tails out of that sentence.  I have some guesses as to what you mean, but I guessed wrong the first time so I am likely to guess wrong again.  Still I am going to make another pass.

There are a number of "reason codes" (codes FICO uses to explain why it has dinged your credit score).  A few of them say something like "Too many recent revolving accounts."  If those codes still are part of FICO 8, that seems to imply that FICO has some kind of internal definition of what constitutes a "recent" revolving account.  Obviously if a credit card is 25 days old, that's recent.  But 26 months old, surely that's no longer recent.  So a reasonable question might be: At what point does FICO stop penalizing your CC as a recently opened revolving account?  You may be asking that question and in particular asking if 90 days is the breakpoint, after which your CC is considered a totally "positive" account.

Am I understanding you better this time?  If not, see if you can find the article you originally read.

[CreditMagic7]

You may be asking that question and in particular asking if 90 days is the breakpoint, after which your CC is considered a totally "positive" account.

 ^ THIS

Now you're 100% on track as to if this even exists within a FICO new credit formula or some off the cuff exaggeration.

Hopefully i can surface that article at some point so we can pick it apart if it's genuine or not.

Thanks for the reply

[Anonymous]

Awesome.  Glad I understand your question.  I like your plan to see whether you can find the article that prompted you to think along these lines.  I can tell you a few things for sure, but am more likely to be of help if I can see that first.  Post it on this thread and I will be on the lookout for it.

Hope you have a good week!

[Revelate]

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@CreditMagic7 wrote:

I been trying for a couple of days now to find a topic (maybe not even on this board) that suggested that FICO views a new credit card account as more of a POSITIVE if within that first 90 days after activation some useage/activity is reported on it (assume a balance posts?) as opposed to if you decided to put your new Visa/MC/Amex bankcard(s) on the local back burner so-to-speak and they simply report (provided that lender does report w/o useage) a zero balance during that time.

Is there anything at all to this regarding new cards? IIRC it had something to do with at a particular point in the scorecard the new INQ/TL(s) ding begins to become regarded as something of a POSITIVE going on forward from there.

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How would such a thing be tracked under the current algorithms where utilization has no memory?  If high balance = 0, drop score?

Put simply I extremely doubt this.  Historically when high balance was the limit for the majority of cards, I could see this, but now?  Nah.