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No Scores... Trying to make sure I understand how this works.

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No Scores... Trying to make sure I understand how this works.

I've had two credit card accounts open since 2004, but in the last 14 months they both closed my cards due to inactivity. I know... I shouldn't have let that happen, but what's done is done. I'm trying to get the card issuer for the more recently closed one to reopen the account, but I'm not putting a lot of faith in that happening and in the meantime I've opened a new card to at least get started with getting an active account on my report again.

With that as the background... Apparently, having no activity on my reports for the last 6 months has resulted in no longer having a FICO score. I'm trying to understand when I will have one again, and just how the new accounts I'm using to re-establish it will affect it in order to understand exactly how to go about rebuilding.

From what I've read, these are the conditions needed to generate a score:

1) At least one account which has been open for six months or more.
2) At least one account that has been updated in the past six months.
3) No indication that the consumer is deceased.

I'm not too worried about 3. I think I type pretty good for a dead guy, so I am confident I can fool the system. Smiley Wink

 

I think 2 is my problem right now. I have not had any active accounts since the end of February, so there have been no updates for the past 6 months.

 

Condition 1 confuses me a little. Do my closed accounts still satisfy that condition, or does the account that "has been open for six months or more" also have to be one that is still open? The distinction being whether a score can be generated again as soon as an active account hits my credit report, or whether I need to wait for my new account to hit 6 months old.

 

In regards to how the new account(s) will affect my future score, is it true that closed accounts are included in the average age of accounts calculation? I know that new accounts have  a negative impact, but is it just that they drag the average account age down, or is there some additional penalty for individual accounts under a certain age? If so, what is that age?

 

I feel like that's kind of a lot of questions packed in one message. Thanks in advance to anyone that can help me understand!

Message 1 of 9
8 REPLIES 8
Super Contributor

Re: No Scores... Trying to make sure I understand how this works.

My comments below in blue.

 


@MFUserJ wrote:

I've had two credit card accounts open since 2004, but in the last 14 months they both closed my cards due to inactivity.

 

Would you mind posting about your experience in this thread?

 

https://ficoforums.myfico.com/t5/General-Credit-Topics/Credit-cards-closed-due-to-inactivity/td-p/53...

 

I know... I shouldn't have let that happen, but what's done is done. I'm trying to get the card issuer for the more recently closed one to reopen the account, but I'm not putting a lot of faith in that happening and in the meantime I've opened a new card to at least get started with getting an active account on my report again.

With that as the background... Apparently, having no activity on my reports for the last 6 months has resulted in no longer having a FICO score. I'm trying to understand when I will have one again, and just how the new accounts I'm using to re-establish it will affect it in order to understand exactly how to go about rebuilding.

From what I've read, these are the conditions needed to generate a score:

1) At least one account which has been open for six months or more.
2) At least one account that has been updated in the past six months.
3) No indication that the consumer is deceased.

I'm not too worried about 3. I think I type pretty good for a dead guy, so I am confident I can fool the system. Smiley Wink

 

I think 2 is my problem right now. I have not had any active accounts since the end of February, so there have been no updates for the past 6 months.

 

Condition 1 confuses me a little. Do my closed accounts still satisfy that condition, or does the account that "has been open for six months or more" also have to be one that is still open? The distinction being whether a score can be generated again as soon as an active account hits my credit report, or whether I need to wait for my new account to hit 6 months old.

 

A closed account is fine for meeting condition #1.

 

In regards to how the new account(s) will affect my future score, is it true that closed accounts are included in the average age of accounts calculation?

 

Yes.  Moreover, they continue to age even after being closed.

 

I know that new accounts have  a negative impact, but is it just that they drag the average account age down, or is there some additional penalty for individual accounts under a certain age? If so, what is that age?

 

One of the scoring factors is Age of Youngest Account.  Your AoYA was greater than 12 months (very good).  It will soon be 0 months (bad).  An AoYA of 0 won't wreck your score, just lower it a bit.  And of course if you were to stop opening new accounts eventually your AoYA will be greater than 12 months again.

 

There is also likely to be a penalty when a significant percentage of your accounts are "new" -- if by new we mean less than 12 months.  That's different from the AoYA penalty.

 

There is also the inquiry that comes with the new account as well.

 

I feel like that's kind of a lot of questions packed in one message. Thanks in advance to anyone that can help me understand!


Can you clarify for us whether the two credit cards that were closed were your only cards?  Or did you still have others?  If so how many others?

Message 2 of 9
New Member

Re: No Scores... Trying to make sure I understand how this works.

@CreditGuyInDixie wrote:

Would you mind posting about your experience in this thread?

 

Sure, I will when I get a chance to write up a bit more.

 

A closed account is fine for meeting condition #1.

 

That's great news. So I should at least have a score again once my new account hits my reports. That'll at least give me a baseline to go from to figure out what else I need to do.

 

Yes.  Moreover, they continue to age even after being closed.

 

Awesome. I thought that might be the case since a monitoring service shows the age of an auto loan I opened in 2010 and paid off in 2013 as over 8 years, but it's nice to have confirmation.

 

One of the scoring factors is Age of Youngest Account.  Your AoYA was greater than 12 months (very good).  It will soon be 0 months (bad).  An AoYA of 0 won't wreck your score, just lower it a bit.  And of course if you were to stop opening new accounts eventually your AoYA will be greater than 12 months again.

 

There is also likely to be a penalty when a significant percentage of your accounts are "new" -- if by new we mean less than 12 months.  That's different from the AoYA penalty.

 

Do we know that "significant" is in this context? Unfortunately, I do not have very many accounts on my credit report. Just that one brings me to 25% "new" accounts and I'll probably have to open at least one more new one if I can't get the older ones reopened. (Per my mortgage broker, I'll need at least 2 accounts active in the past year... I can still count the more recently closed one, but only for a couple more months and probably not long enough to both get all this straightened out and get the loan through.)

 

There is also the inquiry that comes with the new account as well.

 

As far as I can tell it actually looks like BoA only did a soft pull when approving the card, but I had already inquired about a mortgage pre-qual and they did perform a hard pull associated with that. I'm not sure if that has anything to do with why I'm not seeing another hard inquiry for the CC app, but in any case the monitoring tools I currently use are still only showing 1 inquiry at the moment. For all I know it's being categorized wrong though.

 

Can you clarify for us whether the two credit cards that were closed were your only cards?  Or did you still have others?  If so how many others?

 

They were my only two. In fact, they and the aforementioned auto loan are the only accounts that appear on my reports.

Message 3 of 9
Super Contributor

Re: No Scores... Trying to make sure I understand how this works.

I don't think you mention that you want to buy a home in your first post, but you allude to that a few times in your second post.

 

When would you ideally like to do that?

Message 4 of 9
New Member

Re: No Scores... Trying to make sure I understand how this works.

Ideally? As soon as possible, or at least as soon as reasonable.

 

Sorry for the vague answer, but the reality is that I can stay where I am indefinitely. I just don't want to, and I am already on very strong financial footing in every way except for the issues with my credit credentials. I guess I could sum up my attitude this way...

 

Somewhere between immediately and right after the holidays would be nice, however unlikely.

 

In a few months could be okay, and on the bright side if I wait until early spring then at least it won't be as likely for a snow storm to hit when I'm moving.

 

A year(ish)? I might be able to grin and bear it if there was significant benefit to doing so, but with rates trending upwards I do honestly worry a little that I'd just be more or less treading water if I'm just holding out until I can qualify for a better rate. I'm not that savvy with this stuff so maybe I'm off base, but I do worry that a "good" rate then may be pretty close to what a "just okay" rate is now.

 

A few years? ... No. I know myself and that would end up snowballing into even longer for reasons I'm probably better off discussing on a psychiatry forum rather than a financial one, so let's just leave it at I wouldn't want to wait that long.

Message 5 of 9
Super Contributor

Re: No Scores... Trying to make sure I understand how this works.

If I were you I would use some free tools (like Credit Karma) to monitor your reports.  (Reports, not scores.)  When the new card is appearing on both your EQ and TU report, make sure that it has a small positive balance on it.  Like $15 say.

 

Then use the $1 trial at Credit Check Total to confirm that you have three FICO 8 scores.

 

Once you have done that, sign up for the $40/mo myFICO Ultimate product and see what your mortgage scores.

 

Since you already have a mortgage lender, I suggest you talk with him and figure out exactly how many open credit cards he would like you to have and then get those ASAP.  Then delay pulling your mortgage scores untill you have all the new open cards on your reports.  You want all cards reporting zero except one, with the remaining card reporting a balance of (say) $15.

 

Can you list all your accounts and their ages, including closed accounts?  Depending on how many you have and how old they are, and may be in your interest to have three open cards.

 

Also, do you have a parent or spouse who could make you an AU on a very old card with a zero balance and which has no history of lates?

 

Finally, would you mind heading over to that thread I mentioned and posting your experience with the cards closed due to inactivity?

Message 6 of 9
New Member

Re: No Scores... Trying to make sure I understand how this works.

@CreditGuyInDixie wrote:

If I were you I would use some free tools (like Credit Karma) to monitor your reports.  (Reports, not scores.)  When the new card is appearing on both your EQ and TU report, make sure that it has a small positive balance on it.  Like $15 say.

 

Then use the $1 trial at Credit Check Total to confirm that you have three FICO 8 scores.

 

Once you have done that, sign up for the $40/mo myFICO Ultimate product and see what your mortgage scores.

I'm already doing most of that (CK monitoring, etc.) and was planning to sign up for the myFICO service on the suggestion of my lender. I actually already tried to, but apparently they won't process the order if they cannot calculate scores.

 

Thanks for the tip about keeping a small balance. I was planning to get into a routine of using the new card for some minor stuff while still keeping utilization low just to make sure I don't have this inactive problem again, but I just read on another thread that a 0% utilization is actually a negative as well. That's interesting to know.

 

@CreditGuyInDixie wrote:

Since you already have a mortgage lender, I suggest you talk with him and figure out exactly how many open credit cards he would like you to have and then get those ASAP.  Then delay pulling your mortgage scores untill you have all the new open cards on your

reports.

She said they need at least two, and the plan is to communicate about once a week or so throughout this process so she can continue to advise.

 

@CreditGuyInDixie wrote:

Can you list all your accounts and their ages, including closed accounts?  Depending on how many you have and how old they are, and may be in your interest to have three open cards.

2 credit cards, both 14 yrs 3 months

1 auto loan, 8 years and 9 months

 

I'm still holding out a little hope that I can have one of the CCs reopened. I'm not going to be surprised if I can't, but I did just get a call from the issuer and they didn't give me an immediate, "no," so I view that as at least being a good start. I was told my case is being forwarded to the department that reviews such things and I should hear back in 5-10 business days.

 

If that doesn't work out then... I'm not sure exactly how to estimate what my score will be once it can be generated again, but I don't think it will be tragically low. My thought is that I may run less risk of applications being denied if I wait until the first new card hits my reports and then go from there. Yes, it adds time, but a few weeks isn't going to kill me. (Assuming the new card should hit somewhere in the ballpark of the first statement date?)

 

@CreditGuyInDixie wrote:

Also, do you have a parent or spouse who could make you an AU on a very old card with a zero balance and which has no history of lates?

Probably not... No spouse and my father is deceased. I guess I can ask my mother to pull her credit reports so we can see if she has any that would fit the bill. I'll also have to ask the broker if she thinks it would help. I've read stories of mortgage lenders wanting AU accounts removed from credit reports.

 

I've also read that some card issuers may report the date an AU was added rather than the original account open date... I don't suppose anyone has ever tried to gather data on which may do that, have they?

Message 7 of 9
Super Contributor

Re: No Scores... Trying to make sure I understand how this works.

Regarding AUs: the folks here on the forum seem to have a good idea of which CC issuers are likely to give you a "Date Opened" of today (bad) vs. the Date Opened that the original cardholder actually opened the card (good).  I'd figure out which cards (if any) of your mother's are options, and then create a new post asking for which of those issuers are most likely to use the older date.

 

If you have a sibling who has the same last name as you that might also work.

 

Regarding the reopening of closed cards:

The issuer may tell you that it is willing to do that, but you later find out that the Date Opened of the reopened card is today, rather than the original date.  In that case there's no real advantage in having them "re-open" it.  Basically you are just opening a new credit card.

 

You mention that you have an auto loan that was opened over 8 years ago.  When was it closed?

Message 8 of 9
New Member

Re: No Scores... Trying to make sure I understand how this works.


@CreditGuyInDixie wrote:

You mention that you have an auto loan that was opened over 8 years ago.  When was it closed?


Last payment was 10/1/2013, reported (per Equifax) on 10/31/2013.

 

 

Message 9 of 9
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