New account reporting and 14 point drop!

[RHAL]

My new citi card just started reporting today on equifax. I have a high util of 60% and I thought a new 2000 limit card would help. Wrong!! 14 point drop! Bahh, well I will just have to suck it up. It must be worth it in the long run... right? Has anybody else had a similar situation and how long did it take for you to jump back?

[Anonymous]

It all depends on your individual credit profile. 

IMO bringing down your UTIL will improve your score with-out the concern of the new account dropping your scores. From what others have reported when opening new accounts your scores usually rebound in about 6 months, while others have waited as long as a year.

[joestay]

Your average age of account drop.  that's why the score drop.

[MarineVietVet]

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@joestay wrote:

Your average age of account drop.  that's why the score drop.

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That might be it but a lower AAoA does not automatically happen with a new account. For example since AAoA is rounded down for scoring if a new account lowers an AAoA from 5.8 years to 5.2 years the AAoA will still be looked at as if it was 5 years. Hence no damage done to your score.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[RHAL]

Hmmm....

My average age of accounts haven't changed at all. I have a lot of closed accounts that are fairly old and that still count. On top of that, this is the first new card I have got in 4 years. That couldn't be the problem. It must just simply be something about having a new account show on my report and bring my score down. My util went down 15% with this and my score still dropped. That was why I am so surprised.

[llecs]

OP, I wouldn't worry about it. I've lost an average of 20-25 points with each new TL added. I think fellow forum users, only guessing here, lost on avg. a bit less than that. I've found that most of my points return after 6 months from the open date and the rest comes back by a year.

[ficonightmare]

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@RHAL wrote:

Hmmm....

My average age of accounts haven't changed at all. I have a lot of closed accounts that are fairly old and that still count. On top of that, this is the first new card I have got in 4 years. That couldn't be the problem. It must just simply be something about having a new account show on my report and bring my score down. My util went down 15% with this and my score still dropped. That was why I am so surprised.

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How is this possible if this your first new card in 4 years? I would think your AAoA has to change....

[vanillabean]

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@ficonightmare wrote:

How is this possible if this your first new card in 4 years? I would think your AAoA has to change...

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Let's say you got 5 cards 4 years 11 months ago. As the AAoA is rounded down, the result is 4 years.

So you get a new card, whose age is 0 years 0 months. The new AAoA is 4 years 1 month, which rounds down to 4 years.

So the AAoA hasn't changed.

[MarineVietVet]

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@Anonymous-own-fico wrote:

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Let's say you got 5 cards 4 years 11 months ago. As the AAoA is rounded down, the result is 4 years.

So you get a new card, whose age is 0 years 0 months. The new AAoA is 4 years 1 month, which rounds down to 4 years.

So the AAoA hasn't changed.

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ETA: I could have edited out the dumb mistake I made in this post but I might as well leave it for all the world to see. To be human is to err. Anyone reading this will spot the mistake quickly enough.

I believe your math is incorrect.

Your AAoA is the sum of the ages of every account (except CA collections) on your report, whether open or closed, calculated in months, divided by the number of accounts and then divided by 12. I use the division by 12 to make it easier to convert into years. This is measured from the time each account was opened until present.

You’ll need to figure the age of each account, open or closed, on each report. If all three reports are identical (very unlikely), you're in luck; otherwise, you'll need to run this for each report.

Therefore the number of months (59) divided by number of accounts (5) equals 11.8. Divide this by 12 and the AAoA is .983 years. If you add another account to this it would be 59X6X12= .819 years AAoA.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[ficonightmare]

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@Anonymous-own-fico wrote:

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@ficonightmare wrote:

How is this possible if this your first new card in 4 years? I would think your AAoA has to change...

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Let's say you got 5 cards 4 years 11 months ago. As the AAoA is rounded down, the result is 4 years.

So you get a new card, whose age is 0 years 0 months. The new AAoA is 4 years 1 month, which rounds down to 4 years.

So the AAoA hasn't changed.

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You're right.