Originally Posted by
melodys
I recently started reading about churning credit cards and thought I would dip my toes in the water. With my 800+ credit score I applied for two cards (chase sapphire and Alaska airlines) then watched in horror to see my credit score drop 20 points. I monitor my score with myfico. What did I miss? Why so much more than the 2-5 points per application that I had read about?
This is the primary reason I, personally, dislike travel bloggers. They paint this picture of unlimited free travel anywhere, with no consequences, and do a terrible job conveying the risks involved.
So folks like our OP jump in, blissfully unaware of what will actually happen in the real world. The bloggers conveniently omit important details, like the fact that most of them have very long credit histories, filled with lots of fat that reduces the impact of new applications. Or that many of them don't especially care about FICO scores, since they want no other types of credit. Etc.
Shame on bloggers. But also, shame on anyone who jumps into this without thoroughly understanding how it will impact their own personal situation. There is plenty of material out there to understand FICO scoring and credit.
Rather than be any more righteously indignant about it, here are some resources:
How a real FICO score is calculated:
http://www.myfico.com/crediteducatio...yourscore.aspx
Where to get a real FICO score:
http://ficoforums.myfico.com/t5/Gene...de/td-p/662549
The myfico forum that answers any question you could ever have about the impact of applying for credit cards:
http://ficoforums.myfico.com/t5/Cred...d-p/creditcard
Originally Posted by
gloreglabert
Just as it's very difficult to end up with an 800+ score, it's similarly very easy for an 800+ score to drop. It's also a complete non-issue, because anything above a 760 or so is going to qualify for anything. Most of us don't see 20 point drops because we aren't starting at 800+ to begin with -- churning doesn't normally support 800+ scores (which again, doesn't really matter).
Finally some good advice. Fair Isaac themselves say the highest score that matters is 760, as that is frequently the cut-off for the lowest interest rate on a 30-year mortgage. Anything above that is vanity. The only situation I can think of where it
might matter is in a competitive bidding environment, like applying for a lease in Manhattan. Maybe there's a shock value for a landlord to see 800+ on a report. Who knows.
Originally Posted by
1200GS
Myfico is likely overly concerned with your average age of accounts, more so than the hit of the inquiry. I know they are (or affiliated with) FICO itself, but do they pull actual bureaus, or use a different algorithm like 'free' reporting from banks, etc? If you've been trucking along with older credit profiles for awhile, a few new lines can definitely lower it a tad.
Your questions are easily answered...
Myfico gives a mortgage-industry-version of a real Equifax FICO score. Therefore, what they are "overly concerned" about are things that actually change your score.
New credit lines can lower your score. But they can also raise it. Understanding
why is what's important and there is plenty of information from good sources to explain it all.
Why would anyone take the word of any single poster on a chat forum (especially someone named
MDtR-Chicago) or any single blogger? Credit worthiness is one of the greatest assets anyone can have in modern society. Would we trust an anonymous Internet forum with our 401(k)? Or healthcare choices?