Comments on: New Credit Card Costs ±14 FICO Points

By: Jessica Bosari

Jessica Bosari — Mon, 16 Aug 2010 13:55:03 +0000

Credit scores are so personalized, it’s hard to say the drop was solely because of opening a credit card. It’s like insurance. Two people with identical lives may pay different rates because of factors they did not consider. I’d like to see FICO confirm this fact before I took it as gospel.

By: Wilma

Wilma — Mon, 04 Jan 2010 17:07:27 +0000

Getting the wrong info on your report taken off is time consuming and tedious. Letters and phone calls don’t always fix it right away. I had to write lots of “Cry Baby” letters when going for a mortgage because of erroneous info on my reports that weren’t fixed right away.

By: The Other Schmitty

The Other Schmitty — Wed, 30 Dec 2009 21:45:42 +0000

My guess is that you lost 14 points because you were so close to perfect. I think the amount of reduction would decrease exponentially with a decrease in the initial FICO score.

It’s like the time some guy in a new Porsche Cayman bumped into my 15 year old car while parking. We each had a tiny scratch. I said, “meh;” whereas the other guy threw a hissy fit.
Okay, maybe it’s nothing like that at all

I can tell you that my FICO score dropped about 120 points (form around 790 to 670) when some erroneous information about a mysterious account going into collections appeared on my reports. The really bad part is that Experian somehow confirmed that bad information (the other two agencies deleted it), and so far it’s still on my credit report.

By: zapeta

zapeta — Tue, 29 Dec 2009 14:22:22 +0000

Well, I think that this just follows common advice…if you’re planning to apply for a loan or something where your score is going to be very important, don’t apply for any new credit cards for a year prior to that.

By: Shirley

Shirley — Tue, 29 Dec 2009 13:07:37 +0000

I am still getting mail offers on a credit card that I instructed to be closed 2 years ago. This is with Chase and I haven’t used it for about 4 years. Should I just leave the situation as is, rather than contact them again, to save my credit score?

By: Alex

Alex — Tue, 29 Dec 2009 08:39:14 +0000

I often receive letters from the bank saying that I have the option to increase my credit card limit.

Buyer beware, they are not doing me any favours. If I want to make a large purchase on my credit card, I simply add more funds to my credit card account a few days earlier. That way when I use my card the purchase is already paid off and I don’t get hit with any interest charges.

This is one huge benefit of internet banking.

By: aua868s

aua868s — Tue, 29 Dec 2009 04:55:34 +0000

i meant not applying for a loan!

By: aua868s

aua868s — Tue, 29 Dec 2009 04:53:47 +0000

14 points/credit card is scary! luckily i am applying for a loan for the next 5 years or so.

By: LeanLifeCoach

LeanLifeCoach — Tue, 29 Dec 2009 02:22:33 +0000

Jim: You need to check out the credit score simulator on myFico.com. Based on my experience I learned that you score is based on the data as of the date it is pulled. Your score is also affected by current debt/credit ratio.

We pay all cards off at the end of the month. At the moment I pulled by report we had $5386 in charges (I travel routinely) and I had a score of 785.

If this was all paid off at the moment my score would not have been different. But if I had paid off only 90-95% the simulator predicted a higher potential score.

Turns out they want to see some debt, just very little.

Could have been that the day one of your wife’s reports was pulled had more or less current charges than the other in addition to a new card and reduced average history.

By: Izalot

Izalot — Tue, 29 Dec 2009 01:42:55 +0000

I agree 14 points is huge! Imagine if she opened up multiple credit cards, would the effect be a sum effect or do you hit a plateau? I would be curious to see how long her score would stay that way or does it peak right back up again.

By: Kira

Kira — Mon, 28 Dec 2009 20:30:12 +0000

I was very anal about my credit score before applying for a new mortgage on our new house this last Spring. I personally kept open a large limit credit card with a zero balance at a bank I hated (Citi). After the house closed, I closed the card too (it was my oldest card). My score took a HUGE hit in terms of credit utilization and age, but at that point it didn’t matter to me anymore.

By: lostAnnfound

lostAnnfound — Mon, 28 Dec 2009 19:03:37 +0000

I opened a new Visa to replace a gas charge card, but this was just done this month, so nothing has changed as of it.

However, this summer American Express closed an account that I had not used in some time & my score (through Credit Karma) dropped from 794 to 770. My actual FICO before that was 798, so Credit Karma was in line with that, although I did not get a report this quarter from one of the big three yet. This is credit utilization opposite of what you wrote about…an account was closed and my total credit utilization percentage then went up.

By: MichaelM

MichaelM — Mon, 28 Dec 2009 18:27:54 +0000

Given that credit utilization is a FICO factor, then a larger credit limit could maybe help mitigate the 14 point drop (or maybe it mitigated a 20 point drop in your wife’s case!).

I just applied for a new Credit Card, to replace one from a credit union in a city I moved away from. I consciously decided to apply for the new card before closing my old card so that decreased credit utilization wouldn’t negatively affect my chances of getting a new card.

By: John DeFlumeri Jr

John DeFlumeri Jr — Mon, 28 Dec 2009 18:23:30 +0000

Thanks for analyzing this info. It does make a huge difference in your interest rates. I know from my 25 years in the automobile business.

John DeFlumeri Jr

By: Chris

Chris — Mon, 28 Dec 2009 17:43:48 +0000

I wonder how often they change their grading/scoring ruberics. For instance, lets say absolutely nothing changes in one’s report, will their score stay the same?