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how will my accounts aging to 1 year affect my score

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Anonymous
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how will my accounts aging to 1 year affect my score

Rigth now my FICO 8 scores are around 600. I am working to get my mortgage scores up. They are around mid 500s. Last spring I did an app spreed to add new lines of credit since I didnt have any revolving credit at all. I have 9 cards all reporting positive. Two cards have already hit the year year mark and all but one of the rest will hit 1 year in May of this year. What kind of a credit increase can I expect to see if any? 

 

Thanks!

10 REPLIES 10
Anonymous
Not applicable

Re: how will my accounts aging to 1 year affect my score

Just a general guess, you should expect 3-5 points for each inquiry when they hit 1 year, then about 15-20 points when the youngest account hit 1 year. Other than that, it depends on where your average age of accounts is and whether it crosses over scoring thresholds.
Message 2 of 11
Anonymous
Not applicable

Re: how will my accounts aging to 1 year affect my score

If your youngest account was opened in May 2018, on May 1 2019 it will reach 12 months in age.  At that time you'd expect to see around a 20 point score increase on your FICO 8's for AoYA reaching 12 months.

Message 3 of 11
Anonymous
Not applicable

Re: how will my accounts aging to 1 year affect my score

Okay thanks for the feedback. That's awesome.
Message 4 of 11
SouthJamaica
Mega Contributor

Re: how will my accounts aging to 1 year affect my score


@Anonymous wrote:

Rigth now my FICO 8 scores are around 600. I am working to get my mortgage scores up. They are around mid 500s. Last spring I did an app spreed to add new lines of credit since I didnt have any revolving credit at all. I have 9 cards all reporting positive. Two cards have already hit the year year mark and all but one of the rest will hit 1 year in May of this year. What kind of a credit increase can I expect to see if any? 

 

Thanks!


You've gotten good answers from @Anonymous  and @Anonymous , so I'm going to answer a question you didn't ask: here's what you can do now to enhance your mortgage scores.

 

1. Have all but one of the cards report a zero balance.

2. Make no applications for any other credit.


Total revolving limits 657200 (536700 reporting) FICO 8: EQ 712 TU 710 EX 708

Message 5 of 11
Anonymous
Not applicable

Re: how will my accounts aging to 1 year affect my score

Thank you for the info SouthJamaica. I know about no new accounts and low utilization. When we couldn't mortgage last year we opened new lines so they could age over the next year. I am looking forward to seeing those accounts age to 1 year in May with 1 year of on time payments.
Message 6 of 11
rbentley
Established Contributor

Re: how will my accounts aging to 1 year affect my score


@Anonymous wrote:

If your youngest account was opened in May 2018, on May 1 2019 it will reach 12 months in age.  At that time you'd expect to see around a 20 point score increase on your FICO 8's for AoYA reaching 12 months.


Could one reasonably expect the same score increase on your FICO 9's?  Would the obtaining of a new card down the road result in a year long loss of 20 points?

Message 7 of 11
SouthJamaica
Mega Contributor

Re: how will my accounts aging to 1 year affect my score


@Anonymous wrote:
Thank you for the info SouthJamaica. I know about no new accounts and low utilization. When we couldn't mortgage last year we opened new lines so they could age over the next year. I am looking forward to seeing those accounts age to 1 year in May with 1 year of on time payments.

You're probably not going to like what I'm about to say, but I would feel that this thread is incomplete if someone doesn't say it, based on the scenario you have described.

 

1. Number of cards reporting a balance is a completely separate factor than utilization. It is a crucial factor in the mortgage scores. It is much less important in FICO 8 and 9. Fortunately, it's something you can control.

 

2. Your focus on 1 year aging is, IMHO, misplaced, as your average age of accounts has been buried by your adding 9 new accounts, and will remain so for a while. Unfortunately, that is something you cannot control since it's in the past. I'm glad you now know about not applying for new credit, but you apparently did not know about that a year ago when you added 9 new accounts. 2 or 3 would have been enough.

 

3. Your age of newest account factor won't be great for awhile either; I would not be surprised if this factor causes demerits, and triggers negative reason codes, for the next couple of years. Yes it will be less damaging in FICO 8 and 9, and FICO 8 industry scores, after passing a 1 year threshold, but it will continue to damage your mortgage scores IMHO.

 

4. Your focus on FICO 8 and FICO 9 is misplaced. The mortgage scores behave very differently. My mortgage scores are usually 50 points less than my FICO 8's and 9's.

 

5. Your scores are probably being beaten down by negatives; if I were you I would focus on getting rid of those.

 

6. I would also advise you to be more patient about applying for a mortgage. I think you should wait until your mortgage scores are significantly higher.

 

 

 


Total revolving limits 657200 (536700 reporting) FICO 8: EQ 712 TU 710 EX 708

Message 8 of 11
Anonymous
Not applicable

Re: how will my accounts aging to 1 year affect my score


@rbentley wrote:


Could one reasonably expect the same score increase on your FICO 9's?  Would the obtaining of a new card down the road result in a year long loss of 20 points?


I'm not sure about the impact of the 12 month AoYA threshold on FICO 9, although I'd expect a somewhat similar result to the movement seen in a FICO 8 score.

 

Yes, obtaining a new account (not just a card, but any new account) would result in an AoYA drop to 0 months and a 15-20 point or so loss.  Those points would return when AoYA once again reaches 12 months.

Message 9 of 11
Anonymous
Not applicable

Re: how will my accounts aging to 1 year affect my score

I appreciate your feedback. You are very helpful but I did already know about what you said.
I dont pay as much attention to my FICO8 as I do my mortgage scores but the benefit of seeing my fico8 increase is nice.

We intend to apply for a mortgage when our scores reach 640 which is what we need for the loan and homebuyer program we will be using.

As far as score drop from AAOA we didnt see much of one, even in mortgage scores. We have seen more increases than decreases. We are stalled out right now because we have to pay a settlement on a large loan that went into default in 2015 and a smaller collection from the same year. Once those are paid the biggest wall for us will be overcome.
And I know uti and card balances are different. AZEO is a well discussed topic on the forums. And the one should be a non store card that reports less than 8.99%
I appreciate your feedback. I learn a lot from the boards. Still learning things every day.
Message 10 of 11
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