New account reporting point drop

[Anonymous]

So I recently opened several new accounts. 3 of the 5 new have started reporting. That bring my revolving cards on my report to 4 so far. I have been checking my scores regularly and paying attention to the score change and what is different so that I can see firsthand what is happening. 

When my 2/5 new started reporting my AAoA dropped because I went under 2 years. Now when 3/5(4th overall) started reporting my score dropped 4 points. My AAoA went from 1 year 11 months to 1 year 8 months. Both of the cards are dated 9/1/18 so it didn't drop my AoYA since the last one that reported was the same. So I don't think the point drop was from that. Overall my total util is 7% and that particular card is 17%. So I know I am under the main thresholds there. But all 4 at the time reported balances. 2 of them are paid off now. I just used them as they came in and didn't know the statement dates. Not worried as I don't need the scores now but will be implementing AZEO from here on out most months. 

Could the 4 point drop be due to a 4th account reporting a balance? They were reporting 3/3 with balances so it's not like I went from a card without a balance to carrying a balance. Is there some trigger like that with all cards having a balance in combination with particular carrying like going from 3 to 4?

[Anonymous]

The total percentage of your accounts that are new has gone up and continues to go up with each new account you add.  That's a metric that helps a scoring model see whether the person is grabbing lots of new credit in a way he hasn't before.  Many models include this metric.  FICO seems to say in the Credit Education tab on this site that it does this (much as many other models do).

So this may be part of what's happening.

From a practical perspective, you'll solve many of the scoring issues by just not applying for any more credit for the next 13 months.  All the inquiries will become unscorable, your Age of Youngest will cross over 12 months, and 0% of your accounts will be considered new (assuming FICO defines that a new account as one opened in the last 12 months).  Plus your AAoA will increase by a year.

[GFer]

New accounts / aaoa down and multiple cards reporting balances. You are exactly right.  It'll lessen with time, and you are right in that if you aren't going to be applying for anything anytime soon--no big deal.

Sounds like you kinda did what I did long ago. I opened multiple lines to start building.  It hurt my score for awhile, but over time, the thicker file has been to my benefit.  The hardest part is having patience!

[Anonymous]

I hope so. The patience was easy while waiting for all of my bad stuff to fall off since I just forgot and never applied for anything and lived using cash.

But once I saw my EX Fico was 720 with only 1 cc I figured I needed to thicken it up. Though it was best to get my cards at one shot instead of always going and opening a new one and consistently bringing down my age. I can let them all age together.

It’s so tough to be patient when a month and a half ago I was 720 and now I’m 676. Most likely drop more when the other 2 start to report as well. I know overall I’m in a better spot than I was 6 weeks ago it’s just annoying.

Only thing I plan on applying for is a new car lease in the next few months. I’m hoping to wait until the new year but no way I make it a year. So hitting one year of youngest account is a long ways off for me. But with 6 cc aging and hitting the year mark themselves and even 6 month I think I read will start to put some points back up on the board.

Before I do apply for the new car I will be sure to be using AZEO and getting my other car paid down to 8.9%.

[GFer]

Exactly, about letting them age together!  Your score will start ticking up between 3-6 months!

[NRB525]

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@Anonymous wrote:
I hope so. The patience was easy while waiting for all of my bad stuff to fall off since I just forgot and never applied for anything and lived using cash.

But once I saw my EX Fico was 720 with only 1 cc I figured I needed to thicken it up. Though it was best to get my cards at one shot instead of always going and opening a new one and consistently bringing down my age. I can let them all age together.

It’s so tough to be patient when a month and a half ago I was 720 and now I’m 676. Most likely drop more when the other 2 start to report as well. I know overall I’m in a better spot than I was 6 weeks ago it’s just annoying.

Only thing I plan on applying for is a new car lease in the next few months. I’m hoping to wait until the new year but no way I make it a year. So hitting one year of youngest account is a long ways off for me. But with 6 cc aging and hitting the year mark themselves and even 6 month I think I read will start to put some points back up on the board.

Before I do apply for the new car I will be sure to be using AZEO and getting my other car paid down to 8.9%.

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In your opening post, you note a 4 point change. What you describe here from your mini-spree is 45 points.

How much of that 45 points was realized at what point in the application / new card reporting / utilization change cycles?

With that information, in scoring terms, do you think it would be better to just apply for one new card, rather than three?

Congrats on getting past the baddies, and seeing you can get cards that can be useful to you.

[Anonymous]

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@Anonymous wrote:

Not worried as I don't need the scores now....

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That's from your initial post.  In your next post, though, you mention that you plan an auto lease in the next few months.

So strictly speaking you do not need the scores now but you do need them very soon.  This is just an FYI on communication.  People can advise you best when they correctly understand your needs.  I assumed from your initial post that you planned on gardening for a long time, and you were just curious about the theory behind the scores, not any practical upcoming need.

I do like your idea of implementing AZEO and urge you to do that as swiftly as possible.  What is your current CC util?

Also like your idea of paying all existing loans down to < 8.99% of the original loan amount.  Is your auto loan the only open installment account that you have?  A paydown to 8.5% might be better, since you don't want $10 of interest to push you back over 9.001%.

For the future, you may want to gather more advice before opening a ton of cards shortly before a major credit need (an auto lease).  That may not have been the best choice, but it is in the past and AZEO plus auto paydown may give you the score boost you need to get best rates.

[Anonymous]

@Nrb525  

I was 720 when I first started. After my first 2 INQ I dropped to 701(the future inq were on TU and EQ no more on EX). Then I missed paying off my only cc (acquired 6 months ago) on statement date by one day and it reported 362/1000(36%) instead of zero. I then dropped to 674. Once my first new cc(Disc $10000 limit) reported and my utilization dropped to nothing my score went back up to 718. At that point my AAoA was just over 2 years. I got an uber card about 3 weeks later and it reported 2 days later. Now with it being my second new card and third overall, my utilization didn't change since I was already at the lowest threshold. That did drop me below 2 year AAoA and it reported $15 from expedited delivery. So now all 3 cc were also reporting a balance and my score then dropped to 680. I attributed that to all cards reporting balance and AAoA to under 2 years. Once the third new card from Penfed reported with a balance I dropped 4 points to to 676. All the while my util has been below 8%. I still have NFCU and Amex PRG left to report. My AAoA will still remain above 1 year so I won't cross anymore thresholds there. And I haven't seen anyone say that your scores drop from say 1.8 years down to 1.2 years or anything like that. So yes short term it wouldve been better to apply for one but I would be absorbing these AAoA point drops for a longer period of time had I just done one at a time. This way I just got them over with and can let them age and use a little bit every month. I was only cash before and now use the cards for everything. I hit my PRG sub my first month.

@CreditGuyInDixie

I do plan on gardening with the exception of the car loan/lease. My auto scores are over 700 so I am not too worried as the dealer I was speaking with uses those. And if I qualify in the 2nd tier and my payments are slightly higher, I can refinance if I have to at a later date. But I think I will be ok with whatever happens. Also, I will be calling Penfed to see if they would use my original pull for a loan as I have read many times on here they do that once in a while. Again if not I am not too worried. My Ex fico is my lowest and even at 676 I will be getting the lowest % I have gotten in mine and wifes last 6 cars.

So overall I was inquiring about specifics for scoring. Just kind of wondering about 2 more cards reporting but not crossing any thresholds or utils, if I can expect more small point drops or if they will get bigger as there are more new cards. I am planning on gardening with the exception of car loan and any cli on my cards I can get without a HP. I am going to implement AZEO as I am just waiting for them to all report to hit that. One last thing is that I am going to try and get a 20 year card with perfect history as an AU. I bought my parents house so I share an address with one they used to have as well as last name. If I can get to report on my behalf my AAoA will go up to over 3 years. I understand upon manual review it will be noticed but in the future for instant approvals it should help. Even if it doesn't help on instants I won't be applying for anything until my AAoA is over 2 years again and at a point I won't drop down with the new card added. And as I acquire more cards that is obviously easier to do since you take such big hits with small number of accounts. I got all of those new cards to help me long term and not immediate future. That being said I am not ignoring and giving up on my scores as I had in the past and want to do what I can. All I can do is pay down my current car loan and cc AZEO. Time is the only other thing. And thank you I will pay the loan down a little lower so as to avoid any interest pushing it back up. I hadn't thought about that.

Hope that clarifies things a little bit.

[Anonymous]

Very helpful!

Where is your loan utilization now?  I know you plan to bring it to 8.5% -- but we can make guesses as to how much help that act will get you if you tell us where it is coming from.

I like the AU card idea a lot.  Assuming FICO 8 recognizes/accepts the AU (and it may not) you will get a ton of help on a factor called Age of Oldest Account, which is different from AAoA.  Have you double checked with the card holder and asked them whether they can bring the card's balance to zero in the two months prior to the auto lease app?

PS.  Not all lenders/dealers use the Auto Enhanced flavor for their auto leases/loans.  Quite a few use the generic "classic" flavor for it.

[Anonymous]

The util on the current loan is about 50%. But it was a small one so amount owed is actually about $4500 total. So I will drop about $3500 on it since I will be making payments in the meantime until I apply for a new one and that should bring it down in range. 

The AU card would be my mom and she always pays off in full each month if it is even used at all. I just need to make sure she doesn't use it for about a week after the due date to ensure the zero balance. It is a BOA card so if it doesn't report I am hoping that maybe they will allow me to be put on a joint account holder. I have read they are one of the only banks that did allow it at one time.

My oldest account currently is a paid off loan that is just over 7 years which is what is helping my AAoA. My next oldest line is my current car loan which is about a year and a half. Then a local CU cc that is 7 months now. So as you can see I had a real bad profile and waitred for many years for everything to drop off.

I had asked my local Toyota dealer and they said they used the auto scores. But it could be the finance guy I spoke with just said anything to get me out of his hair since I wasn't buying anything at the time and I had told him I was months away. I am going to call Penfed however and see if they will go off of my HP from opening my membership and PCR card. If they do then I'm all good since it'll be a good rate. My score from their pull was a 745 on EQ or TU. And I only had one new cc reporting at that time.