why did hard inquiry increase score 57 points?

[Anonymous]

A few days ago I applied for Chase Sapperian Preferred.  I most likely got denied (received the message "you will have our decision in 7-10 days).  I monitor my credit thorugh myfico.com.  I checked today and my credit score improved from 699 to 756.  Stated reason for change: Chase inquiry.  

About a month ago, I was approved for both BofA ($5,000) and Chase Slate ($4,000) but these inquiries were already reflected in my credit score.  My approval improved my credit a combined 14 points for such approvals.  Therefore I don't understand why such a huge increase to my Experian score.  My TU and EQ remain unchanged.

The only other possible change I can think of is that my dad added me as an AU to his Chase card.  He has a $6,600 cl and 0% utilization (over 8 years of on time payments with 0 late payments).  Could this be the reason?  Or is the model wrong?

Any ideas??  Thanks!!

[Thomas_Thumb]

Most likely the point increase is due to an rise in aggregate credit limit and a corresponding decrease in aggregate % utilization - perhaps from both your new cards and the credit line from the AU status.

Inquiries increasing score - that would create some turmoil.

[Anonymous]

My guess: myFICO uses certain triggers to check for changes in score.  One of those triggers would be a credit inquiry.  The credit inquiry and a credit limit increase (utilization decrease) may have occured at the same time, but since the credit inquiry is whaty triggers the alert that's why it mentions credit inquiry as a possibility for credit score increase.  It's a completely automated system with generic responses.

[Anonymous]

Maybe you are both right.  I find 57 points to be a significant increase though.  I'm will under the assumption that the score will decrease a bit in a few weeks.  My TU score is 702 whereas my EQ score is only 678.  Not sure why these have not been updated?

[Anonymous]

Its really hard to say without really examining your credit report.  Understanding FICO scoring is like the cracking the Davinci Code.  Perhaps you made a milestone in credit age or a 30 day late passed a certain age?

[Anonymous]

I subscribed to obtain the Experian report directly from the website.  I noticed a few items of significance 1) my AU status on my dad's card has been updated and I have been credited with the 8+ years of on time payments and 2) a collection from 7 years ago ($1,854 apartment) fell off sometime this week and 3) my credit score is actually higher through Experian than on the myfico website (764 vs. 756).  Having said that, the inquiries for the two cards that I was approved for (Chase and BofA) do appear on the report but the actual credit limits, credit utilization for these cards do not.  

I wonder why myfico has not updated any of this information yet.  Is it worth it to subscribe to the Experian website instead?  I registered for the 7 day trial and need to cancel within a month or I will be charged the $25.

[Thomas_Thumb]

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@Anonymous wrote:

I subscribed to obtain the Experian report directly from the website.  I noticed a few items of significance 1) my AU status on my dad's card has been updated and I have been credited with the 8+ years of on time payments and 2) a collection from 7 years ago ($1,854 apartment) fell off sometime this week and 3) my credit score is actually higher through Experian than on the myfico website (764 vs. 756).  Having said that, the inquiries for the two cards that I was approved for (Chase and BofA) do appear on the report but the actual credit limits, credit utilization for these cards do not.  

I wonder why myfico has not updated any of this information yet.  Is it worth it to subscribe to the Experian website instead?  I registered for the 7 day trial and need to cancel within a month or I will be charged the $25.

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A collection falling off is significant to say the least. That would likely overshadow anything else for score impact.

If your credit history is 8+ years old, then you won't get a boost from the AU account associated with length of credit history. Possibly some help if it increases your AAoA.

[Anonymous]

I was under the impression that collections did not matter that much if they were close to the 7 year mark.  My credit limit is now listed as $7,600 ($1,000 from my Credit One plus the $6,600 from AU on Chase).  I wonder what the impact will be from the additional $9,000 that I will get from the other cards.

By the way, what is a good credit utilization ratio?  Right now, I have less than 1%.  I have exactly 10% on each of the Chase and BofA cards.

[Thomas_Thumb]

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@Anonymous wrote:

I was under the impression that collections did not matter that much if they were close to the 7 year mark.  My credit limit is now listed as $7,600 ($1,000 from my Credit One plus the $6,600 from AU on Chase).  I wonder what the impact will be from the additional $9,000 that I will get from the other cards.

By the way, what is a good credit utilization ratio?  Right now, I have less than 1%.  I have exactly 10% on each of the Chase and BofA cards.

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For top scores keep aggregate utilization between 1% and 9%. I keep my utilization between 1% and 6% and my score stays constant at those levels FWIW On an individual credit card basis, the scoring models are much less restrictive and allow you to post a relatively high UT% on an individual card without hurting your score.

My advice is to stay below 50% on a per card basis and below 9% overall. Some people are adamant about keeping individual cards below 30%..You are in the sweet spot for utilization both in aggregate and on the MUCH less restrictive individual card basis.

I'll let someone else comment on # cards reporting and scoring implications. My focus is utilization, on time PIF of statement balances and AAoA

[Anonymous]

Thank you for all your help!