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?

I have seen the same thing with the pseudo scores. The only explanation I could come up with is that they exaggerate the impact of credit pulls. My "real" scores were impacted by between 5 and 10 points. Don't worry, the pseudo scores will recover rather quickly, possibly even when they see your increased line of credit.

That is a large drop. I have not had a drop of more than 7 points per card. Is there another possible cause like a high percentage of credit utilization on another card or another issue on top of the two new cards?

No, nothing else is going on. I pay off my credit cards in full every month. My credit score had been holding steady at just above 800 for more than one year. Even buying a house last spring only reduced my score by 3 points.

That is a bigger drop than I have seen. Hopefully, it will recover quickly.

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).

I started with a 767 and applied for 5 cards. Myfico notified to tell me that I had dropped to 726 two days later, but at the end of the week it was back around 759. I did get approved for large available credit amounts, so that helps, but who knows. I think they are just overestimating overall impact.

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.

But honestly, scores are only a pride thing, unless it stops you from qualifying for something you want a line on. I've financed airplanes with lower scores. What does it matter?

You needn't wach in horror. 720 is considered sufficient for most any type of borrowing (mortgage, car financing) and credit card applications.

The higher your score the greater the effect of credit card pulls. Also you have shortened the average age of your cards (15% of total FICO score)

In a week or so your creit score will move back up to where it was. It may even go higher since now that you have more credit available your utilization % will drop

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

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.

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?

Thanks for the thoughtful responses. I like to think of myself as an informed person and I dislike being surprised. With my long credit history and no need for credit purchases in the foreseeable future it should be fine. Now I have a better idea what to expect and what I can reasonably do and still keep my credit score at the high level that is acceptable to me.

The other thing that surprised me was just how high the credit limits were. No wonder people get themselves in trouble, but that is a discussion for another thread.

Congrats on paying off your card every month. However that is not what credit utilization refers to and this is a fairly significant factor in most people's score. Did you run up charges on a card or cards around the same time you applied for these others?

Even if you pay them off like you are supposed to, your score can suffer as you look like an increased risk.

My credit score randomly dropped around 20 points too recently. It was after a churn, but I had refreshed it after all the inquiries had hit and it had no real impact. But then later it dropped. I actually wonder if there has been some change to the algorithm the FACO I was using used? (CreditKarma in this case)

With regards to the OP and the dire consequences blah blah.... sounds like someone went from at least 800 to at least 780. I can assure you the lifetime financial consequences of such a drop is absolutely zero. Now someone going from 715 to 695... that might have a real monetary impact

Paying off your bills each month is indeed admirable and advisable but that does not mean there is no balance used in the score calculation. Issuers report a balance once a month generally at statement time and if you are using the card even if you pay in full you do have a balance. That balance is part of the utilization calculation. The algorithm doesn't change very often although it is different at each bureau to optimize the data structures at that bureau but the data used to calculate the score changes with each new update and with thousands of issuers reporting the data is unlikely to exactly the same with each score calculation.

I completely agree with this-- I had a 800+ Fico for over 10 years, and, in fact, my score was so static that I had no idea that the scores could bounce around like they do. I had one or two cards that I hardly used (still have them, 20+ years now.
My first foray into the miles and points world involved actually USING my cards...I use them for every possible charge now. So, my CL utilization skyrocketed and my score took a 20 point hit. My counter measure on that is to pay the balances before they report, whenever possible.

Then, I discovered Flyertalk and rethought the whole lure of sign up bonuses. I admit to be stunned and jealous of multiple 300,000+ balances that so many of these flyertalkers have in their mileage accounts. Last year, I was thrilled to buy some tickets and still have any miles left over. My plans got bigger-- I applied for 5 cards and got them all. My score went up, down, up, down further.

Like my title says... with an 800+ score, there's really no where to go but down. I think jostling the score impacts has a BIGGER affect on higher scores, because it really, truly, honestly is HARD to keep your scores up over the 800 mark. My score is now bouncing around at about 750.

But, here's a sobering whammy... my DH's score was 800+ and we did 3 things: Got a home loan refi, used a 0% interest balance transfer, and applied for 3 credit cards. Chase moved some credit from one card to the newly opened card and caused the balance transfer balance to go to 60% utilization of the CL. The FICO dropped like a rock! His score in 1 week went from 802 to 729! A more than 70 point drop! I was stunned! That's not what the blogs told us! That was a couple of weeks ago, I'll have to see what happens next.

So, I agree with MDHR--- the blogs go on and on about a 3 -5 point drop. That's not a guarantee. Everybody's score is different, but I'm still hoping that my scores are done with the roller coaster ride and that I will only see these 3-5 point drops when I next apply for new cards.

Then, I'm understanding the term "excess credit score" now. I have been so proud of my score, but would I rather travel? I'm trying to realistically evaluate what do I need my credit for? A new car? Nothing? How badly/how soon do I need/want those new miles in my account? (or... when are those bongo offers going to expire?).