FICO Impact of new credit card? (2024)

I’m curious about what those more knowledgeable than me think about what this change in my credit card use would do to my FICO score:

I just got a new Freedom Unlimited card which I plan to use for everything but travel spend. Previously, most of my spend was on my JPMR card, which has a hidden trade line. Because of the hidden trade line, my credit utilization appeared low. If I switch my spend as contemplated, apparent utilization will go through the roof.

My FICO score hovers around 800. How much impact would this change cause?

NB: Not planning on applying for any loans, so this is a question born of curiosity.

Thanks.

Define “through the roof”.

You can game utilization by paying down before statement cut date (for most banks)

What is overall reportable credit line?

What is max spend per month? % of overall? % of individual card?

pizzy wrote: ↑Wed Nov 15, 2023 3:20 pm
You can game utilization by paying down before statement cut date (for most banks)

Thanks for the suggestion!

Cruise wrote: ↑Thu Nov 16, 2023 4:32 pm

pizzy wrote: ↑Wed Nov 15, 2023 3:20 pm
You can game utilization by paying down before statement cut date (for most banks)

Thanks for the suggestion!

Also, Chase reports a zero balance as soon as you pay it off. So if it closed with a $10k balance Dec 1 and you pay off Dec 5, it will show zero balance. Only problem is if you're using the card all the time, it's difficult to get the Card to a total zero balance unless you push a payment that will result in a credit balance.

cubs1999 wrote: ↑Thu Nov 16, 2023 7:01 pm

Cruise wrote: ↑Thu Nov 16, 2023 4:32 pm

pizzy wrote: ↑Wed Nov 15, 2023 3:20 pm
You can game utilization by paying down before statement cut date (for most banks)

Thanks for the suggestion!

Also, Chase reports a zero balance as soon as you pay it off. So if it closed with a $10k balance Dec 1 and you pay off Dec 5, it will show zero balance. Only problem is if you're using the card all the time, it's difficult to get the Card to a total zero balance unless you push a payment that will result in a credit balance.

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Thank you.

I'm just going to go with the flow and see what the impact will be. Looks like I'll be using the new card for everything except travel, but the travel spend is the highest of all (and will remain hidden by the hidden trade line).

UpperNwGuy wrote: ↑Thu Nov 16, 2023 8:33 pmWhat is a hidden trade line?

Simply put, it means that one’s account balance is not reported to credit bureaus. My main card has this feature, which makes it seem like I charge very little relative to my publicly seen credit limit.

Cruise wrote: ↑Thu Nov 16, 2023 10:48 pm

UpperNwGuy wrote: ↑Thu Nov 16, 2023 8:33 pmWhat is a hidden trade line?

Simply put, it means that one’s account balance is not reported to credit bureaus. My main card has this feature, which makes it seem like I charge very little relative to my publicly seen credit limit.

So, the credit agency sees the credit limit but not the balance? I assume the credit scoring algorithm would just disregard this card entirely, for lack of usable information (?)

LeftCoastIV wrote: ↑Thu Nov 16, 2023 11:49 pm

Cruise wrote: ↑Thu Nov 16, 2023 10:48 pm

UpperNwGuy wrote: ↑Thu Nov 16, 2023 8:33 pmWhat is a hidden trade line?

Simply put, it means that one’s account balance is not reported to credit bureaus. My main card has this feature, which makes it seem like I charge very little relative to my publicly seen credit limit.

So, the credit agency sees the credit limit but not the balance? I assume the credit scoring algorithm would just disregard this card entirely, for lack of usable information (?)

IIRC, the whole card is hidden from credit bureau.

EDIT: I just ran my free annual credit report from the three agencies. None of the agencies showed any evidence of this credit card in their listing of my accounts. Truly, a "hidden trade line" is hidden.

I am not an expert on the algorithm, but can give you some data points that might help.

My credit score fluctuates between 800-825 (FICO 8 not Vantage), (used to be up to 850 but no longer since I have no other debt (car, mortgage) anymore).

The fluctuations are all based on utilization. So there are apparently two sets of utilization on the scoring algorithm, overall and per card.

30% of total credit. I never reach this in terms of total credit available, nor do I reach 30% on any one card. Of course I pay everything off each month, but not to zero, meaning just the amount due, and not recent but unbilled charges.

Per Card Utilization. I do however, have high monthly spend (say 10-20% of that specific card's credit limit) and almost exclusively on one card, and this is what causes the hit.

Note, and this is where I get fuzzy, you may have a temporary hit for the new line of credit just based on age of the new line.

So I would not be surprised if you saw a 25pt drop and fluctuation. I would be surprised if it approached 50.

One other thing, get the highest limit you can on the new card.

Good luck and let us know.

Cruise wrote: ↑Thu Nov 16, 2023 11:55 pm

LeftCoastIV wrote: ↑Thu Nov 16, 2023 11:49 pm

Cruise wrote: ↑Thu Nov 16, 2023 10:48 pm

UpperNwGuy wrote: ↑Thu Nov 16, 2023 8:33 pmWhat is a hidden trade line?

Simply put, it means that one’s account balance is not reported to credit bureaus. My main card has this feature, which makes it seem like I charge very little relative to my publicly seen credit limit.

So, the credit agency sees the credit limit but not the balance? I assume the credit scoring algorithm would just disregard this card entirely, for lack of usable information (?)

IIRC, the whole card is hidden from credit bureau.

EDIT: I just ran my free annual credit report from the three agencies. None of the agencies showed any evidence of this credit card in their listing of my accounts. Truly, a "hidden trade line" is hidden.

How does one even get such a card?

And what are some reasons to have this type of card? I can think of some less savory reasons...

Is this what is referred to when someone "sells trade lines"?
If not, do you know how that differs?

RM

We have used and had a single CC with a moderately high limit that we always payoff monthly. Our FICO runs around 800 for many years. We decided to get a second CC since we had experienced a couple of times when the existing one had to be reissued due to a hack. The application reduced our FICO about 15 points for a month, maybe longer, but now they run in the 820 range, so our experience was positive in reducing the percentage of available credit typically used.

Tim

Lastrun wrote: ↑Fri Nov 17, 2023 7:20 amI am not an expert on the algorithm, but can give you some data points that might help.

My credit score fluctuates between 800-825 (FICO 8 not Vantage), (used to be up to 850 but no longer since I have no other debt (car, mortgage) anymore).

The fluctuations are all based on utilization. So there are apparently two sets of utilization on the scoring algorithm, overall and per card.

30% of total credit. I never reach this in terms of total credit available, nor do I reach 30% on any one card. Of course I pay everything off each month, but not to zero, meaning just the amount due, and not recent but unbilled charges.

Per Card Utilization. I do however, have high monthly spend (say 10-20% of that specific card's credit limit) and almost exclusively on one card, and this is what causes the hit.

Note, and this is where I get fuzzy, you may have a temporary hit for the new line of credit just based on age of the new line.

So I would not be surprised if you saw a 25pt drop and fluctuation. I would be surprised if it approached 50.

One other thing, get the highest limit you can on the new card.

Good luck and let us know.

Thanks for your insights. I will evaluate whether I can switch some of my credit from my hidden trade line and put it on the new card with the visible line.

I'll report back when history reveals itself.

ResearchMed wrote: ↑Fri Nov 17, 2023 8:11 am
How does one even get such a card?

And what are some reasons to have this type of card? I can think of some less savory reasons...

Is this what is referred to when someone "sells trade lines"?
If not, do you know how that differs?

RM

I received this JPMR card back in 2016 when my previous JP Morgan card was discontinued. I had no clue about tradelines at the time, but similarly-situated folks on Flyertalk educated me about hidden tradelines.

I don't know anything unsavory about it, or any negatives at all. One of the neat features of the card is that one can charge 3X one's card's credit limit. I've only exceeded my limit once, and this was very recently when booking a bunch of cruises.

I don't know anything about selling trade lines.

I understand that business cards have hidden tradelines, but mine is not a business card.

The only personal card I know of with the hidden tradeline is the JPMR. They appear to have imposed a "membership" requirement for this card, and that is that you have to have a private banking relationship with JP Morgan.

Lastrun wrote: ↑Fri Nov 17, 2023 7:20 amI am not an expert on the algorithm, but can give you some data points that might help.

My credit score fluctuates between 800-825 (FICO 8 not Vantage), (used to be up to 850 but no longer since I have no other debt (car, mortgage) anymore).

The fluctuations are all based on utilization. So there are apparently two sets of utilization on the scoring algorithm, overall and per card.

Another important utilization factor is the number or fraction of credit cards with balances.

When I got a FICO 9 from my mortgage lender, complete with reason codes, I could see that my score dropped 10 points due to "number of revolving accounts with balances" when that number was three rather than two. (I have two credit cards that I use every month, and one JCPenney card that I use only when I shop there.) Similarly, with the VantageScore on Credit Karma, my score drops a few points when I charge on the JCPenney card, even though that charge is usually less than $100.

OP here, with an update, and requesting your insights and advice:

So since I got my new Freedom card, and then started charging things that formerly were charged to my hidden-tradeline-card, my FICO score has gone from about 800 to 768. This is the lowest I have ever seen the FICO score. I suspect that this change is because we charge a lot on the Freedom card and, for example, we currently have 1/3 of our credit limit of this card used.

I'm curious about whether that 1/3 limit is considered high, and whether it would help my FICO score to request more an increase in this card's credit limit? Other thoughts?

Many thanks, and Happy New Year!

Cruise wrote: ↑Sun Dec 31, 2023 8:30 pmOP here, with an update, and requesting your insights and advice:

So since I got my new Freedom card, and then started charging things that formerly were charged to my hidden-tradeline-card, my FICO score has gone from about 800 to 768. This is the lowest I have ever seen the FICO score. I suspect that this change is because we charge a lot on the Freedom card and, for example, we currently have 1/3 of our credit limit of this card used.

I'm curious about whether that 1/3 limit is considered high, and whether it would help my FICO score to request more an increase in this card's credit limit? Other thoughts?

Many thanks, and Happy New Year!

yeah you have to keep the utilization of EACH CARD at below 30% or you get dinged. Found that out the hard way once. If I had known, I would have requested a higher credit limit for that particular card which was going to have a high usage for a particular period of time (a promotional period/no interest). Good news was once the debt was paid down (at no interest) my credit score went back up over 800 again. So yes requesting a higher limit on that particular card should do the trick. But always keep usage at 30% of available credit.

arcticpineapplecorp. wrote: ↑Sun Dec 31, 2023 9:02 pm

Cruise wrote: ↑Sun Dec 31, 2023 8:30 pmOP here, with an update, and requesting your insights and advice:

So since I got my new Freedom card, and then started charging things that formerly were charged to my hidden-tradeline-card, my FICO score has gone from about 800 to 768. This is the lowest I have ever seen the FICO score. I suspect that this change is because we charge a lot on the Freedom card and, for example, we currently have 1/3 of our credit limit of this card used.

I'm curious about whether that 1/3 limit is considered high, and whether it would help my FICO score to request more an increase in this card's credit limit? Other thoughts?

Many thanks, and Happy New Year!

yeah you have to keep the utilization of EACH CARD at below 30% or you get dinged. Found that out the hard way once. If I had known, I would have requested a higher credit limit for that particular card which was going to have a high usage for a particular period of time (a promotional period/no interest). Good news was once the debt was paid down (at no interest) my credit score went back up over 800 again. So yes requesting a higher limit on that particular card should do the trick. But always keep usage at 30% of available credit.

Interesting.

My experience -- I have one WF Visa card that often hits 50% and on occasion 60% before the auto-pay happens. If it's going to get above 60%, I make a partial early payment. My FICO is generally in high 830's. This card is relatively new and is used for bill paying. Some months get ugly, like Nov with 2 property tax bills on it. This not my only WF card.