topic Re: Average age of accounts AAOA in Understanding FICO® Scoring

Average age of accounts AAOA

To-Be-Continued — Mon, 30 Jan 2012 19:50:33 GMT

What does Fico see as the optimal average age of accounts? '

-TBC

Re: Average age of accounts AAOA

llecs — Mon, 30 Jan 2012 20:26:51 GMT

My FICO report says 6 to 12 years in terms of high achievers. My EQ shows an AAoA as 3 years and is listed as a positive and TU lists as a negative, but that's based off my buckets on both reports.

Re: Average age of accounts AAOA

To-Be-Continued — Mon, 30 Jan 2012 20:47:19 GMT

I'm trying to figure out what kind of a hit I'm going to take when the new CC hits my reports bringing my AAOA down to 4.8 years.

-TBC

Re: Average age of accounts AAOA

MarineVietVet — Mon, 30 Jan 2012 21:02:55 GMT

To-Be-Continued wrote:
I'm trying to figure out what kind of a hit I'm going to take when the new CC hits my reports bringing my AAOA down to 4.8 years.

-TBC

Since FICO rounds down AAoA for scoring as long as your old AAoA was also less than 5 years you won't be hurt at all.

Do you know what the old AAoA happened to be?

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Average age of accounts AAOA

To-Be-Continued — Mon, 30 Jan 2012 21:15:15 GMT

5.6 years over 6 accounts.

Re: Average age of accounts AAOA

MarineVietVet — Mon, 30 Jan 2012 21:30:45 GMT

To-Be-Continued wrote:
5.6 years over 6 accounts.

Then you'll lose a year of AAoA unfortunately.

Re: Average age of accounts AAOA

CS800 — Tue, 31 Jan 2012 00:35:15 GMT

I've been meaning to ask a question about AAoA but always forget.

If I get a card today, will it be counted as 1 year or 0 year? I'm assuming 0 until the next year when it turns one.

Re: Average age of accounts AAOA

pizzadude — Tue, 31 Jan 2012 01:49:29 GMT

CS800 wrote:
I've been meaning to ask a question about AAoA but always forget.

If I get a card today, will it be counted as 1 year or 0 year? I'm assuming 0 until the next year when it turns one.

I think that is correct, if it reported soon after your first statement it would be 1 month old..... 0 years, 1 month....

Re: Average age of accounts AAOA

MarineVietVet — Tue, 31 Jan 2012 04:03:35 GMT

pizzadude wrote:
CS800 wrote:
I've been meaning to ask a question about AAoA but always forget.

If I get a card today, will it be counted as 1 year or 0 year? I'm assuming 0 until the next year when it turns one.
I think that is correct, if it reported soon after your first statement it would be 1 month old..... 0 years, 1 month....

I agree with this. Each individual account is counted month to month but AAoA itself can never be younger than 1 year. Does that make sense?

I recently posted about this. Someone had asked if it's possible to have an AAoA of zero and I found out that the brains behind the formulas were careful so that AAoA is always at least one year. So theoretically you could have one new account just one month old but your AAoA would be one year.

Have I confused everyone?

Re: Average age of accounts AAOA

To-Be-Continued — Tue, 31 Jan 2012 11:19:42 GMT

So in 4 months my AAOA should be back to 5 years? Or do I have to wait until it hits one year? I will also post what if any point hit I take when it reports next month.

-TBC

Re: Average age of accounts AAOA

haulingthescoreup — Tue, 31 Jan 2012 11:43:44 GMT

To-Be-Continued wrote:
So in 4 months my AAOA should be back to 5 years? Or do I have to wait until it hits one year? I will also post what if any point hit I take when it reports next month.

-TBC

If your new AAoA is 4.8 years, you'll be back at 5 in 0.2 years. Realistically speaking, that means 3 months.

Re: Average age of accounts AAOA

pizzadude — Tue, 31 Jan 2012 14:45:14 GMT

MarineVietVet wrote:
I agree with this. Each individual account is counted month to month but AAoA itself can never be younger than 1 year. Does that make sense?

I recently posted about this. Someone had asked if it's possible to have an AAoA of zero and I found out that the brains behind the formulas were careful so that AAoA is always at least one year. So theoretically you could have one new account just one month old but your AAoA would be one year.

Ok, I think I got it ~ of course I haven't had coffee so who knows....

Each account's actual age in months ( even those with less than one year like 0 years 2 months ) is totaled up to calculate the total age. Then divided by the number of accounts. And the result is rounded down to the nearest whole number year, but will not show less than 1 year.

Is that right ??

Re: Average age of accounts AAOA

MarineVietVet — Tue, 31 Jan 2012 19:28:38 GMT

pizzadude wrote:

Ok, I think I got it ~ of course I haven't had coffee so who knows....

Each account's actual age in months ( even those with less than one year like 0 years 2 months ) is totaled up to calculate the total age. Then divided by the number of accounts. And the result is rounded down to the nearest whole number year, but will not show less than 1 year.

Is that right ??

Yes. This is how I calculate AAoA. Your AAoA is the sum of the ages of every account (except CA collections and public records) on your report, whether open or closed, calculated in months, divided by the number of accounts and then divided by 12. I use the division by 12 to make it easier to convert into years. This is measured from the time each account was opened until present.

You’ll need to figure the age of each account, open or closed, on each report. If all three reports are identical (very unlikely), you're in luck; otherwise, you'll need to run this for each report.