Credit glossary
New credit
The FICO category, about 10% of a score for the general population, covering recently opened accounts and recent hard inquiries.
FICO says opening several accounts in a short time can signal risk, especially for people who don't have a long credit history. The category looks at recent inquiries and newly opened accounts, and a new account also lowers your average account age, which sits in the separate length of history category. One more inquiry takes less than five points for most people, and inquiries count for only 12 months.
Rate shopping is protected: multiple mortgage, auto or student loan inquiries within FICO's window count as one. Card applications aren't grouped. The practical rule is spacing. In the months before a mortgage, skip new cards and store financing, since each adds an inquiry and a new account the underwriter will ask about.
Guides that go deeper
- How much does a hard inquiry lower your credit score?FICO says one more inquiry takes fewer than five points off for most people. What that figure leaves out, and the cases where a few points decide a loan.
- How a credit score is calculated, without the pie-chart mythsFICO's 35/30/15/10/10 split describes the general population, not point values. What each factor reads on your report, with the math worked out.
- Mortgage preapproval and credit pulls: what shows up and whenA mortgage preapproval usually means a hard pull from all three bureaus. Why one lender shows up three times, how shopping is scored, and what to avoid.
Sources
- What's in my FICO Scores?, myFICO
- Credit Checks: What are credit inquiries and how do they affect your FICO Score?, myFICO
- How to Rate Shop and Minimize the Impact to Your FICO Scores, myFICO
This is education, not legal or financial advice. Spot an error? Tell us and we'll fix it.