Calculating AAoA if I open a new AMEX?

[chan85]

Trying to figure out my AAoA if I was to open a Amex revolver in Janurary. I have a zync that was backdated to 2007 when I had a my first Amex card, Green charge card. My credit goals are to not add anything unless it does something beneficial- which back dating to 1/2007 would be great for my AAoA but I can't get the math right. 

According to credit.com my credit history goes back 9 years, oldest account 112, average age 52 months, youngest account 12 months. Can't seem to get the math together to figure out how 7 years of history would factor in. Any help?

[longtimelurker]

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@chan85 wrote:

Trying to figure out my AAoA if I was to open a Amex revolver in Janurary. I have a zync that was backdated to 2007 when I had a my first Amex card, Green charge card. My credit goals are to not add anything unless it does something beneficial- which back dating to 1/2007 would be great for my AAoA but I can't get the math right. 

According to credit.com my credit history goes back 9 years, oldest account 112, average age 52 months, youngest account 12 months. Can't seem to get the math together to figure out how 7 years of history would factor in. Any help?

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This is all fairly elementary math!   Basically, the two numbers you need are AAoA, which you have as 52 months, and total number of credit lines (that make up that AAoA).   For simplicity, lets say you had 10 lines.    Then the "total" age of your account is number*AAoA, so say 10*52 months = 520 months.

Now you add a card with 7 years of backdating, = 84 months.  But now you have 11 accounts.  So your new average is (520+84)/11 = 604/11 = 54.9 months

If you have a small number of accounts, backdating will produce a bigger increase, a larger number, not so much.  Here the difference isn't dramatic because 7 years isn't so very different from you current 4.33 year average.  I did a 27 year backdate, and that is more noticeable.

[FinStar]

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@longtimelurker wrote:

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@chan85 wrote:

Trying to figure out my AAoA if I was to open a Amex revolver in Janurary. I have a zync that was backdated to 2007 when I had a my first Amex card, Green charge card. My credit goals are to not add anything unless it does something beneficial- which back dating to 1/2007 would be great for my AAoA but I can't get the math right. 

According to credit.com my credit history goes back 9 years, oldest account 112, average age 52 months, youngest account 12 months. Can't seem to get the math together to figure out how 7 years of history would factor in. Any help?

---

This is all fairly elementary math!   Basically, the two numbers you need are AAoA, which you have as 52 months, and total number of credit lines (that make up that AAoA).   For simplicity, lets say you had 10 lines.    Then the "total" age of your account is number*AAoA, so say 10*52 months = 520 months.

Now you add a card with 7 years of backdating, = 84 months.  But now you have 11 accounts.  So your new average is (520+84)/11 = 604/11 = 54.9 months

If you have a small number of accounts, backdating will produce a bigger increase, a larger number, not so much.  Here the difference isn't dramatic because 7 years isn't so very different from you current 4.33 year average.  I did a 27 year backdate, and that is more noticeable.

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+1

Or, if you would prefer to do your own math based on your specific situation, you can always go with the Excel route > How to calculate AAoA using Excel.

[yudeology101]

I've used the online calculator:    http://seemly.com/aaoa-calculator/

[longtimelurker]

Good for the spreadsheets, but that seems way too much effort. 

There are two numbers on the credit report needed:

1) AAoA

2) # of accounts. 

If you can post here, you should be able to use a calculator to convert AAoA to months (hint, multiply the years by 12 and add the months!), multiply by # of accounts, add the back date of the new account, and divide by (# of accounts + 1).

Using spreadsheets make it sound like a mysterious calculation, whereas it is merely calculating an average....

[too-much-time]

((52 * 10) + (7 * 12)) / (10 + 1) = 54 months = 4 1/2 years.

[chan85]

Well it doesn't surprise me that this is so simple- I have never been very good at math! lol

Ok so according to credit.com I have 42 accounts (student loans double reporting are killing me).

So

42x52=2184

7x12=84

2184+84=2268

2268/53=42.79

Sheesh, so it dropped my AAoA!!! Crrraaaap.....

[too-much-time]

2268 / 43.0 = 52.74 = 4.4 years.

[FocusedAndDetermined]

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@chan85 wrote:

Well it doesn't surprise me that this is so simple- I have never been very good at math! lol

Ok so according to credit.com I have 42 accounts (student loans double reporting are killing me).

So

42x52=2184

7x12=84

2184+84=2268

2268/53=42.79

Sheesh, so it dropped my AAoA!!! Crrraaaap.....

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Why are your student loans double reporting?  Were they transferred?  If so,  the old ones should be reporting $0 balances.  If they aren't, file a dispute with the CRAs.  I had to do that when mine were transferred.  Issue was cleared up pretty quickly.

[longtimelurker]

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@chan85 wrote:

Well it doesn't surprise me that this is so simple- I have never been very good at math! lol

Ok so according to credit.com I have 42 accounts (student loans double reporting are killing me).

So

42x52=2184

7x12=84

2184+84=2268

2268/53=42.79

Sheesh, so it dropped my AAoA!!! Crrraaaap.....

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<offttopic rant>

As math educators complain, it's sad that people who would be ashamed to say "I was never any good at reading" don't see a problem in being bad at math!  They shouldn't be ashamed at not being able to read either, but should not accept failure in either!

Again, math is not magic.   There is no way that adding an account with an age greater the existing average age can lower the average, averages just don't work that way.  Your arithmetic mistake was pointed out, but ideally you would have realized that it must be wrong.

If people really want to make somewhat informed decisions about which card is best, how to compare rewards, what balance transfers make sense and what the cost will be, you need to understand some fairly basic math.  So if you don't, stop reading this board and go and relearn some of this stuff!

<end rant>