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Average Age

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Anonymous
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Average Age

So I am trying to determine what is considered ideal for average age of accounts so I can decide what to keep and close.

I made a spreadsheet to calculate this and I find that if I close one card that is about 5 years old (not my absolute oldest) I will get about a 35 month average assuming on closing the age drops to 0. I have heard it doesn't do that but after 10 years it will fall off credit and then it's age is lost and others I have heard it's age is immediately not counted so I don't what is right but I figured worst case is 35 months. Is that bad? If I left it open it would be an average of 40 months but this card charges me 10 a month just to have, has no rewards and has the lowest limit so it needs to go away.

Should I keep it a while longer for that extra 5 months of average of is it worth closing? My main concern is ensuring I don't face sudden account closures or fico crash as a result.

Utilization is of no concern as it has no balance and combined TL debt is less than 20% of limit anyway.
Message 1 of 16
15 REPLIES 15
Anonymous
Not applicable

Re: Average Age

Close it. It will continue to report and age for up to 10 years, by then your other accounts will also be 10 years older so the hit will be minimal if any.
Message 2 of 16
Anonymous
Not applicable

Re: Average Age

Close it. It will stay on your report for up to 10 years and you'll continue to benefit from its age as long as it's on your report. By then, you'll have more accounts that are older and this card really won't matter that much. Paying $10 a month just to keep your AAoA up by a little just seems asinine to me.
Message 3 of 16
Anonymous
Not applicable

Re: Average Age

Thank you I will do that. I agree it seemed dumb to just keep it but Chase really was going by age and for a while I was not getting approved for any cards simply on that basis so I just wanted to make sure Smiley Happy

Message 4 of 16
Anonymous
Not applicable

Re: Average Age

You've already got a pretty good account age and it'll only keep going up from here. No worries in closing it.
Message 5 of 16
SouthJamaica
Mega Contributor

Re: Average Age


@Anonymous wrote:
So I am trying to determine what is considered ideal for average age of accounts so I can decide what to keep and close.

I made a spreadsheet to calculate this and I find that if I close one card that is about 5 years old (not my absolute oldest) I will get about a 35 month average assuming on closing the age drops to 0. I have heard it doesn't do that but after 10 years it will fall off credit and then it's age is lost and others I have heard it's age is immediately not counted so I don't what is right but I figured worst case is 35 months. Is that bad? If I left it open it would be an average of 40 months but this card charges me 10 a month just to have, has no rewards and has the lowest limit so it needs to go away.

Should I keep it a while longer for that extra 5 months of average of is it worth closing? My main concern is ensuring I don't face sudden account closures or fico crash as a result.

Utilization is of no concern as it has no balance and combined TL debt is less than 20% of limit anyway.

There are no guarantees as to how long a closed account will keep reporting. I had 5 accounts which were closed a year or less when they stopped reporting on Equifax.

 

But it is guaranteed that when the account drops off it will decrease your average age of accounts, and if it's your oldest account it will decrease the age of your oldest account too. So it's best to sock drawer rather than close, unless there's an annual fee involved.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 6 of 16
Anonymous
Not applicable

Re: Average Age

The practical recap of advice on the thread thus far is to close it, since you pay a monthly fee just to have it ($10 every month!) and since closing it will have no impact whatsoever on your AAoA.  (With the caveat that your closed account could get removed early from your reports in the next few years, though that it is very unlikely.)

 

You also ask some theoretical questions, e.g. what FICO considers an ideal AAoA.  There's no upper limit to ideal in this context -- you can't have an AAoA that is too high.  But there is probably a place where FICO stops giving you a scoring benefit for making your AAoA higher.  Consenus here on the forums is to guess that this is probably around an AAoA of 8 years.

 

PS.  I note that you feel that a total utilization of under 20% is ideal for scoring purposes.  That's fine if you are not trying to apply for credit, but just for clarity you do actually get hit with a scoring penalty once you cross over the 8.99% line.

Message 7 of 16
Anonymous
Not applicable

Re: Average Age

I have heard that anything over 8.99% can drop the score a bit but I feel that is too much work for me, having to charge and immediately pay and all that. I want a high score but I have limits to how much work I will put forth for it lol. Im in the mid 740s as it is and once I get a credit builder installment loan (I have none on my reports now) it should go up a little more I would hope. 

 

Its good to know the oldest card I have charges no fees to me and my lifetime right now is 9 years total though so I will keep that open, though I may drop its limit if it helps the other cards I actually use most go higher.

Message 8 of 16
Anonymous
Not applicable

Re: Average Age


@Anonymous wrote:

I have heard that anything over 8.99% can drop the score a bit but I feel that is too much work for me, having to charge and immediately pay and all that. I want a high score but I have limits to how much work I will put forth for it lol. Im in the mid 740s as it is and once I get a credit builder installment loan (I have none on my reports now) it should go up a little more I would hope. 

 

We'd recommend the Share Secured Loan Technique instead of a credit builder loan.  We are currently looking for an alternative to Alliant, which was our recommended lender.  We hope to have some good options in March.

 

Its good to know the oldest card I have charges no fees to me and my lifetime right now is 9 years total though so I will keep that open, though I may drop its limit if it helps the other cards I actually use most go higher.

 

Ironically, having one card with a very high CL can induce other issuers to begin giving you higher CLs.  Thus I'd be cautious about ever requesting a CL decrease yourself.


 

Message 9 of 16
Anonymous
Not applicable

Re: Average Age

Oh okay I will look at that differnet loan technique then thanx!

 

I wont drop my limit then. 

Message 10 of 16
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