What constitutes a "recent" inquiry?

[Anonymous]

Just curious to see if anyone has an inkling re: what FICO considers a "recent" inquiry and, consequently, a "new" account. I imagine that the definition might vary by CRA, but is there a general consensus on whether "recent" or "new" means one month, two months, six months, one year, or longer?

[smallfry]

New accounts are less than 1 year old. In some cases inquiries older than 6 months are ok. Depends on the issuer.

[RobertEG]

There are two different issues here: inquires, whether or not they result in the grant of credit, and the age of accounts should credit be granted.  Inquiries go towards the credit report pull in order to evaluate whether to grant the credit.  These stay on the report for two years, and only count in the scoring algorithm under new credit inquiries, and thus FICO score, for one year, but are still available for other creditors to see for up to two years.  New accounts are scored in the length of credit history portion of the algorithm once the TL is established.   It is clearly factored into the overall average lenght of credit history, and thus will usually lower the avg. age.  Whether there is an additional penalty within the algorithm for accounts less than, say, 6 months or one year old, is an unkown.  Some speculate that there is, but it is not something disclosed publicly by FICO. 

[smallfry]

I have heard the magic age for a newer account to stop hurting altogether and to start helping in a major way is 27 months.

[RobertEG]

I think it depends upon what your avg age of accouts was before you opened the new one.  If the avg age was high to begin with, the affect of a new account on the avg wont be much.  But if the avg age was low before it was added, it could be much more significant.  So, jsut like all other things in FICO scoring, there are no general rules or guidelines... it all depends upon your individual credit history.

[haulingthescoreup]

An inq hurts FICO scores an equal amount each month for 12 months, and then not at all. (This comes from an admin.) For scoring, there's no fade: it either counts, or it doesn't.

An account is considered "new" in FICO scoring for 12 months. Its effect on your average age will vary according to what you already had, as other posters said.

An inq will display on your reports for two years and can therefore be seen by potential lenders. Each lender varies in its degree of allergy to inqs --how many, how recent, etc.

[Anonymous]

I used the what if scenarios on MyFico by testing my recent inquiry at under 6 months and over 6 months. The difference according to MyFico was 5 points.

[RobertEG]

Hey 1111, I have seen different people on this forum emphatically argue (1) that inquiries remain at the same level for the full twelve months, and (2) that they gradually drop off at 3/6/9 months. 

All we know for sure is that after 12 months, they no longer score.   

You will get a lot of anecdotal opionions on this, but none are based on FairIsaac confirmation one way of the other.

I tend to agree with Hauling, due to her superior knowledge combined with my experiience, but it has not yet percolated to the top of the coffee pot as a fact.

I would not rely upon the FICO sim as any indication of the perk in the pot.

Message Edited by RobertEG on 04-20-2008 08:36 PM

Message Edited by RobertEG on 04-20-2008 08:37 PM

[haulingthescoreup]

One problem about modeling inqs is that there's usually a new account attached to it. The account hurts less at 1 month, 3 months, 6 months, 12 - 18 - 24 months,as it turns into a positive tradeline.

What we need is an intrepid member with a boring, static history who will take a bullet for the team by app'ing and being declined, thus no new account. We could then monitor this person's scores to see if there's any fade. Of course, there is no such beast as this member, and even if there were, her/his scores would slowly climb anyway, as existing accounts aged. So we still wouldn't be able to separate the inq effect out!

I was quoting someone who knows on the 12 months and out thing.

[RobertEG]

ROFL! Seeking sacrificial guinnea pigs amongst a bunch of capiitatist hogs to take a voluntary 10 pt new inquiry hit is like askng Hillary Clinton if she would fake it, and claim to be black, and for that reason,be under severe sniper fire in bosniia, a day before the next candidate poll.... well, in retrospectiion, it might just work!   Go for it!  

I am a non-intreprid member, and after my recent divorce, lost my sword to fall upon.  I am sorry to let you all down, team FICO-aholics, but by guinea pig is slumbering.

Message Edited by RobertEG on 04-21-2008 04:13 AM