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Good point for sure. I have a couple of use cases in mind - mortgage rates are currently super low and we might consider refinancing. Second use case, finding a new job. I don't know how common it is anymore for employers to pull a score, but it's there if they do.
May consider adding cards, but not a top priority.
TLin: FYI
In case you didn't know, whenever anyone adds a new credit card, FICO will downgrade your score for two years. I used to have 850s across the board, but once I opened a new credit card account (1-1/2 years ago), until recently my scores dropped down to 830+. A few of my current cards do have my score at 850, but not FICO.
@LilyBee wrote:TLin: FYI
In case you didn't know, whenever anyone adds a new credit card, FICO will downgrade your score for two years. I used to have 850s across the board, but once I opened a new credit card account (1-1/2 years ago), until recently my scores dropped down to 830+. A few of my current cards do have my score at 850, but not FICO.
I agree that new accounts can impact a credit score but the amount of the impact and how long it lingers is very much profile-dependent. As with much on My Fico, it's a YMMV situation. That reported impact from one new account has not been my experience at all.
It may also depend a little on the score variant. FICO 9 seems less sensitive to new accounts and none of my FICO scores reacted as much as you might expect based on your drop with a single new account.
I have opened nine (9) new credit accounts in the past 12 months. You would think based on the reported impact of opening one new account two years ago, that nine new accounts would have totally trashed my scores. And on some profiles (thinner and younger), that might very well be true. Instead, my scores are all still in the 822+ range and some are still reporting that proverbial "850" or very close to it, even with all the activity.
I have had 850's reporting on EQ and TU recently. It's my EX that has been dinged a little from repeated inquiries and new accounts, and has always seemed the most sensitive bureau. Here are my recently reported scores after all the new accounts. (I don't subscribe to My FICO so the scores I have to report are just the one's I have free access to via a lender.)
FICO Score 9:
*850* FICO Score 9 (TU) .... updated 08/05/2020 per NFCU
*850* FICO Score 9 (EQ) .... updated 07/07/2020 per PenFed
*837* FICO Score 9 (EX) .... updated 07/31/20 per Wells Fargo
FICO Score 8:
*842* FICO Score 8 (TU) .... updated 07/20/2020 per Bank of America & Discover
*822* FICO Score 8 (EX) .... updated 08/05/2020 per Experian App
FICO BankCard Score 8:
*863* FICO BANKCARD Score 8 (EQ) on a 250-900 scale
as reported by Citibank on 07/28/2020.
So my "Low FICO Score" is my Experian FICO Score 8 (per Experian App), which recently dropped to 822 after additional new inquiries in May-June-July. That is with the above new accounts, 5 (EX) inquiries in last 12 months and 8 (EX) inquiries in last 24 months. So basically I got the referenced drop but only on FICO 8 (FICO 9 stayed 15 points higher) and only after pretty excessive credit-seeking in last 12 months. And until about two months ago, that EX FICO 8 was still up at 834, even with six new accounts reporting!
This actually might be an interesting side-topic if someone wanted to start a new thread referencing how member's scores vary between the CRB's and the score models. There can be a wide variation.
Congratulations AH. I am not a member of FICO either. But when I purchase an inquiry from them and ask why my score has been lowered, it reports that folks who add a new credit card will be 'dinged' for two years. So, perhaps it's discrimination since I'm only 5 feet tall.
@LilyBee wrote:Congratulations AH. I am not a member of FICO either. But when I purchase an inquiry from them and ask why my score has been lowered, it reports that folks who add a new credit card will be 'dinged' for two years. So, perhaps it's discrimination since I'm only 5 feet tall.
Well, that's not fair to be picking on little girls! FICO scoring is strange sometimes and it seems overly picky. I do agree that new accounts can be a factor but just found the comparison between us (and even between my own but different scores) to be interesting and a good example of how it's impossible to predict with precision how our scores will react. As much fun as it is to keep scores at 850, though, being able to use my credit and still keep scores in the 'near perfect' range (820-849) is an acceptable compromise. I think sometimes we put too much fear into readers on the forum about how much new inquiries or accounts may negatively affect scores.
I'll just add my score timeline here as a datapoint. I've annotated newly opened and closed accounts - the other points are just reported balances going up and down.
@TLinFargo wrote:I'll just add my score timeline here as a datapoint. I've annotated newly opened and closed accounts - the other points are just reported balances going up and down.
Thanks for the data points, @TLinFargo! And that is an interesting chart for those tracking FICO score effects of various events. Just curious but which credit reporting bureau is that data from?
That 25 point drop for opening a new account is huge but as I pointed out, my experience was quite different!
Yes, my EX Fico Score 8 is down to 822 now, but actually that was my one score that (if I'm not mistaken) never hit the full 850 anyway. So even if it was "down" 28 points from a perfect score, that was only after opening a staggering 9 new accounts. My theory is that my long 35 year history and the thickness of my file probably helps minimize the FICO effects of credit-seeking. My Experian mobile APP shows 20 currently open accounts, 26 closed accounts (46 total) with 8 inquiries. I seem to remember EX penalizing my FICO score more than other bureaus for a 30-day late I was carrying until late last year. From my experience, I think Experian is more sensitive to utilization rates and new credit accounts too.
At one point I believe I had 2 above 760 but I know for fact one was My EX lol
Yes, that is Equifax.
This gave me an excuse to post mine as well. The product I have only provides TU scores quarterly. The other CRA were purchased, but since I now get all 3 free somewhere, I onl do the 3B pull about once a year.