How does AAoA work?

[CreditPacMan]

If you open a credit card and let it report but close it immediately after it reports and before the first month .. would the AAoA go down because it'll count the new account with ZERO months of age?

EDIT: I have no intention of doing so .. it's just for the sake of knowledge.

[coldnmn]

Yes it will report for the next ten years even if closed.

[CreditPacMan]

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@coldnmn wrote:

Yes it will report for the next ten years even if closed.

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Yeah but how will the AAoA be impacted? 

[04Cobra]

It will decrease AAoA slightly or even stay the same. Really depends on your overall porfolio

[coldnmn]

To start with that card will be zero months added to current trade line months. Adding all months together and divided by all trade lines on your credit report opened or closed. This will give you your AAoA.

[core]

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altayar wrote
Yeah but how will the AAoA be impacted?

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 It will affect your AAoA just like any other new account would.  Closed or open doesn't matter.  As for the "zero months" thing I don't see the significance.  Next month it'll be 1 month old.  And unsurprisingly, the month after that it'll be 2 months old.  This you can count on.

[coldnmn]

If you had that card and only one other TL with 5 years of credit history your AAoA would be 2 1/2 years.

[takeshi74]

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@core wrote:

It will affect your AAoA just like any other new account would.  Closed or open doesn't matter.

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This.  The hit to AAoA comes from opening the account  (unless one opens a signicantly backdated AmEx card).  There's a Closing Credit Cards sticky that mentions that closing does not affect AAoA.  Whether you leave the account open or close it the account will factor into AAoA until it falls off which is typically 10 years after closing the account.

[longtimelurker]

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@04Cobra wrote:

It will decrease AAoA slightly or even stay the same. Really depends on your overall porfolio

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Well, unless it is a backdated Amex, or ALL your cards are new, it's not going to stay the same.   Whether the decrease is slight or not depends on the number of tradelines you have.   If you have X tradelines, your AAoA is reduced by a factor of X/(X+1) which matters when X is small