New credit lowers score?

Question

I aquired 2 new credit cards in June (BP and Home Depot). My score immediately dropped from 702 to 641 (FICO). As of today my score has not risen 1 point ! True Credit states the reason is I aquired the cards in too short of time. Now had I been denied the cards my score would have not dropped. My banker says I should cancel the cards and it should go back up. Since the score hasn't risen at all in 4 months I'm pondering doing just that! Any thoughts?

the card limits are only 400 and 700. Debt to income is 10% ( moot point since credit bureau does not factor that norr is privy to your income. My other credit cards have a total limit of 10,000 and I only owe 220.00. 1 car loan never late on anything , no collections.

Transunion does not use FICO any longer, they use Vantage.I owe nothing on theses cards. I owe 3% of my total available credit. One of my credit cards show my score each month. I also have a friend that ran my credit thru his car dealership.. all scores are within a 5 point differential, so they can't ALL be wrong. Point is how long before my score starts going up? Been 4 months now

Answer 1

This is some important things to know:

1. Payment history- 35%
2. Total debt owed vs. available credit-30%(debt to income ratio)
3. Length of time establishing credit-15%
4. Types of credit established-10%
5. Inquiries and New accounts-10%

With that said

The 2nd poster's correct about what your banker not knowing what he's talking about. Just by applying for those 2 cards alone, it dropped your score because of the inquiries when you formally applied for credit, regardless if you're approved or not. Cancelling the cards at this point is not going to bring your score up. It can take anywhere between 6 months to a year for your score to even show signs of raising when it comes to new accounts. Opening up the cards also shortened the average age of accounts that you have. You've already done the damage. You'll need to pay on time and keep the balances low in order for those accounts to help your score.

Answer 2

First of all, your banker is clueless telling you to cancel them. Don't cancel the cards. If you have balances on them work on paying them off. This will increase your debt-to-credit ratio; which will increase your credit scores. Canceling the card will reduce your credit score even further, as it's the same as having a balance with no credit line.

Typically, you risk a large reduction in your credit score when you carry a balance that is 50% or more of your credit line. Never charge more than this if at all possible.

If you're getting your credit score from True Credit, you're not getting your actual FICO score; you are getting their score no matter what they tell you. You can only get your actual FICO score by purchasing it from FICO (myfico.com), or applying for a mortgage loan.

Answer 3

Your statement "Now had I been denied the cards my score would have not dropped." is false.

Applying for credit, regardless of the results, hurts your score. Recent inquiries are bad. This includes having a friend's car dealership run your credit.

Answer 4

Every time that friend at the dealership pulls your credit, your score takes another ding. If you want to monitor your credit score, go to MyFico.com. You have to pay but you'll get your real FICO score and it won't ding your credit.

Answer 5

What are your limits? What is your credit to income ratio like?