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Question about AoA and opening/closing accounts

Frequent Contributor

Question about AoA and opening/closing accounts

I know AAoA changes when you open and close an account. So if I wait to close an account that I've had since 06 and open a new account either with Discover or Citi, will it balance out? Might seem like a strange question. Hopefully someone knows the answer.


In the Garden Club since: 07/05/2017


6/9/2008-TransUnion-703
6/9/2008-Equifax-712
6/9/2008 Experian-635

2/16/2011 Transunion - 675
3/11/2011 Equifax - 688
5/13/2011 Equifax - 704
5/28/2011 Equifax - 704
5/28/2011 Transunion - 724
Message 1 of 10
9 REPLIES
Super Contributor

Re: Question about AoA and opening/closing accounts

 


kc12286 wrote:

I know AAoA changes when you open and close an account. So if I wait to close an account that I've had since 06 and open a new account either with Discover or Citi, will it balance out? Might seem like a strange question. Hopefully someone knows the answer.


The account will continue to report for up to 10 years after closing it.  Closing an account doesn't immediately affect your AAoAs.  Only opening an account has an immediate affect on your AAoAs.   

Message 2 of 10
Frequent Contributor

Re: Question about AoA and opening/closing accounts

I guess I had it a little backwards than. Thanks. I was afraid that if I closed an account it would affect AAoA, so I was going to wait to close it. It will be at 0 when I close anyway.

Opening brings the AAoA down by 1 year, correct?


In the Garden Club since: 07/05/2017


6/9/2008-TransUnion-703
6/9/2008-Equifax-712
6/9/2008 Experian-635

2/16/2011 Transunion - 675
3/11/2011 Equifax - 688
5/13/2011 Equifax - 704
5/28/2011 Equifax - 704
5/28/2011 Transunion - 724
Message 3 of 10
Valued Contributor

Re: Question about AoA and opening/closing accounts


kc12286 wrote:

Opening brings the AAoA down by 1 year, correct?



Depends on the age of your other accounts. 

FICO Scores Updated 07/15 EQ08 748 EX08 748 TU08 818
Message 4 of 10
Senior Contributor

Re: Question about AoA and opening/closing accounts


kc12286 wrote:

I guess I had it a little backwards than. Thanks. I was afraid that if I closed an account it would affect AAoA, so I was going to wait to close it. It will be at 0 when I close anyway.

Opening brings the AAoA down by 1 year, correct?


No.  It depends on what your AAoA is and how heavily weighted it is.  Let's say you have only two cards that are 10 years old, you have an AAoA of 10 years.  You add a new tradeline, you now have 3 cards with total age of 21 years (10 + 10 +1) and you have an AAoA of 7 years (21/3).  So adding that one card dropped your AAoA by 3 years.  That is because in this example, you don't have very many total tradelines to balance out the effect.

 

You'll have to figure it out based on your specific situation.   

 

ETA:  Third card would actually be zero years, not 1, so it would drop further, but you get the idea.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Message 5 of 10
Frequent Contributor

Re: Question about AoA and opening/closing accounts

I have an AAoA of five years. Oldest account is 20 years (I was an AU on two of my mother's Amex cards). But my question is, what's counted in AAoA, only open lines, active lines? Can a closed line with a balance be counted? I assume it would be because it still reports a balance until that's paid off.


In the Garden Club since: 07/05/2017


6/9/2008-TransUnion-703
6/9/2008-Equifax-712
6/9/2008 Experian-635

2/16/2011 Transunion - 675
3/11/2011 Equifax - 688
5/13/2011 Equifax - 704
5/28/2011 Equifax - 704
5/28/2011 Transunion - 724
Message 6 of 10
Senior Contributor

Re: Question about AoA and opening/closing accounts


kc12286 wrote:

I have an AAoA of five years. Oldest account is 20 years (I was an AU on two of my mother's Amex cards). But my question is, what's counted in AAoA, only open lines, active lines? Can a closed line with a balance be counted? I assume it would be because it still reports a balance until that's paid off.


FICO counts lines, opened or closed, in your AAoA regardless of whether there is a balance. 


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Message 7 of 10
Frequent Contributor

Re: Question about AoA and opening/closing accounts

Thanks Walt.

 

I take it, it's counted until the account falls off at the 10 year mark.

 

I think I'll take my chances and apply for the two cards I want (likely Discover More and  Citi Forward) and close the one account that's not growing.


In the Garden Club since: 07/05/2017


6/9/2008-TransUnion-703
6/9/2008-Equifax-712
6/9/2008 Experian-635

2/16/2011 Transunion - 675
3/11/2011 Equifax - 688
5/13/2011 Equifax - 704
5/28/2011 Equifax - 704
5/28/2011 Transunion - 724
Message 8 of 10
Senior Contributor

Re: Question about AoA and opening/closing accounts

If the account that isn't growing has no AF, consider keeping it open and not using it.  But yes, it will remain on your report and count toward your AAoA until it falls off in 10 years (they sometimes don't fall off by the way).


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Message 9 of 10
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Frequent Contributor

Re: Question about AoA and opening/closing accounts


Walt_K wrote:

If the account that isn't growing has no AF, consider keeping it open and not using it.  But yes, it will remain on your report and count toward your AAoA until it falls off in 10 years (they sometimes don't fall off by the way).


It's only a $500 limit, they refuse to CLI without a hard pull, won't drop the APR of 14.24% AND the rewards are meh 1pt per $1 spent.  I could keep it open like you suggested and just sock drawer it. 


In the Garden Club since: 07/05/2017


6/9/2008-TransUnion-703
6/9/2008-Equifax-712
6/9/2008 Experian-635

2/16/2011 Transunion - 675
3/11/2011 Equifax - 688
5/13/2011 Equifax - 704
5/28/2011 Equifax - 704
5/28/2011 Transunion - 724
Message 10 of 10