The Credit Thread

I made an observation in a recent thread that a new account isn’t necessarily going to noticeably impact your credit scores.

Here is the ultimate expression of that point, using the Experian FICO 8 (tops out at 850) as a reference point, with an additional update.

Relevant Timeline:

3/25/22 - Experian FICO 8 was 847
4/4/22 - New auto loan reported to Experian (score remained 847)
5/6/22 - Experian FICO 8 moved up to / maxed at 850 due to other changes in my credit file

Keys to this:

Payment history: no late payments, ever, on any account that’s reporting

Relatively long credit history: average age of accounts is between 9 and 10 years

Thick credit file: Dozens of open and closed accounts reporting

Extremely low revolving (credit card) utilization: Balances reporting are well under 1% of total revolving limits

Installment history: at least one open installment account with a relatively low balance compared to the original loan amount

Inquiries: Make very little, if any difference. I have 3 reporting on Experian, but two are older than a year (FICO 8 ignores those completely), plus one from six months ago when I opened a Citi credit card for an $800 sign-up bonus.

Your good credit is there to leverage. Use it every time it makes sense.

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It’s like I wrote that myself. This x1000. Started young as a car aficionado so always was opening auto loans and paying them off quickly and as my income grew my loan amounts grew as I wanted better cars. That in itself and low credit card utilization is what propelled me to the usual 840-850 score.

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This guy fuchs

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