Alright, I've been reading a little bit about how scores are factored (https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/General-Scoring-Primer-and-Version-8-Mas...) and just saw the part about many people seeing a drop in scores once their average age hits 2 years due to a scorecard reassignment.
My average age is 1 year 8 months. We're currently building a house that should take another 10 months. My scores are hovering around 720-730. The lender says I want my scores to be at least 720 for access to the particular loan product we want.
How worried should I be? I imagine the lender will pull my credit in about 8 months to finalize the loan at around 60 days from the home being finished. At that point I will have recently hit that 2 year average age and, according to what I've been reading, my scores will have dropped 15-20 points.
Is that right? If so, how long would it take my scores to rebound (is 4 months enough?)?
I'll have multiple HPs age past a year as well as some hit 2 years which should counteract some of that drop.
I wasn't worried because I assumed that, if anything, an older average age would increase points not lower the scores.
EDIT: Whoops AoOA is the one that can cause drops at 2 years (my oldest is about 4 years). So I'm safe right? Sorry, just started stressing that my scores won't be ready for the mortgage haha.
@Remedios wrote:It's not two years, it's oldest account (open or closed) reaching three years.
If your oldest is over three years old, you have nothing to worry about.
If it's not, you still have nothing to worry about because there is no "drop" on older scoring models used for mortgage lending.
On 8, it hurts ☹️
Oh crap, yeah they use the older ones. So it looks like the take into account my PLOC (opened Jan 2021) as my youngest account instead of my older credit cards. I should still be ok, I think they'll pull my credit in Feb 2022 to finalize my mortgage at which point the PLOC will be over 12 months old.
As far as my oldest account, it's a credit card that's 3 years 11 months. So either way I'm safe. Thanks for the help!
@MickeyGMoney wrote:Alright, I've been reading a little bit about how scores are factored (https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/General-Scoring-Primer-and-Version-8-Mas...) and just saw the part about many people seeing a drop in scores once their average age hits 2 years due to a scorecard reassignment.
My average age is 1 year 8 months. We're currently building a house that should take another 10 months. My scores are hovering around 720-730. The lender says I want my scores to be at least 720 for access to the particular loan product we want.
How worried should I be? I imagine the lender will pull my credit in about 8 months to finalize the loan at around 60 days from the home being finished. At that point I will have recently hit that 2 year average age and, according to what I've been reading, my scores will have dropped 15-20 points.
Is that right? If so, how long would it take my scores to rebound (is 4 months enough?)?
I'll have multiple HPs age past a year as well as some hit 2 years which should counteract some of that drop.
I wasn't worried because I assumed that, if anything, an older average age would increase points not lower the scores.
EDIT: Whoops AoOA is the one that can cause drops at 2 years (my oldest is about 4 years). So I'm safe right? Sorry, just started stressing that my scores won't be ready for the mortgage haha.
The answer is: not at all.
You have nothing to worry about.
The more your accounts age, without new credit applications, the higher your scores will get.
In the rare case that you would get a scorecard reassignment from aging, your scores will usually go up rather than down. In the even rarer case that a scorecard reassignment from aging causes a score drop, you will pick up the benefits of being in a better scorecard quickly.
