Quick AAoA Question

[SuperKirby]

Let me make sure I get this correct.

(Assuming all accounts are CCs)

In a nut shell, if i cancel a CC that is younger than my AAoA, in 10 years (when it drops off), my AAoA will go up

If I cancel a CC that is older than my current AAoA, in 10 years (when it drops off), my AAoA will go down. Correct?

[azguy13]

Ive never really thought of it like that, lol. I would assume you are correct though, just from the math. 

I always look at it like a TL with at least 10 years of age dropping off and I don't like the thought of that. 

[SuperKirby]

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@azguy13 wrote:

Ive never really thought of it like that, lol. I would assume you are correct though, just from the math. 

I always look at it like a TL with at least 10 years of age dropping off and I don't like the thought of that. 

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Yeah, i was looking at it at a pure mathematical stand point, and i need someone to correct me if i'm wrong. 

If my AAoA is 10 years, if I cancel a CC that is 9 years old, mathematically, my AAoA slightly goes up in 10 years.

[SuperKirby]

Some math:

5 cards x 10 years each

1 card x 5 years

AAoA is: 9.16 

If I cancel the 5 year old CC, in 10 years:

AAoA is: 20 years

If I kept the 5 year old CC, in 10 years:

5 cards x 20 years each

1 card x 15 years

AAoA is: 19.16

or Same scenario with 1 card at 9 years old:

5 cards x 10 years each

1 card x 9 years

AAoA is: 9.83 

If I cancel the 9 year old CC, in 10 years:

AAoA is: 20 years

If I kept the 9 year old CC, in 10 years:

5 cards x 20 years each

1 card x 19 years

AAoA is: 19.83

[RobertEG]

Yes, with a potential rub beyond your control......

After you close an account, the creditor can, at any time and solely at theri option, simply choose to report deletion of the entire account.

If they do so, then, ......poof!  Account history nstantly gone.  You always run that risk.

Their are reasons why they might choose to do so, such as clearing out any duty to maintain any CRA updating reporting, or siimple good houskeeping.

Additionally, the CRA could choose to delete earlier than 10 years, which is a totally arbitrary date, so you never know then it will disappear.

I could come in the middle of a future credit app process.

[SuperKirby]

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@RobertEG wrote:

Yes, with a potential rub beyond your control......

After you close an account, the creditor can, at any time and solely at theri option, simply choose to report deletion of the entire account.

If they do so, then, ......poof!  Account history nstantly gone.  You always run that risk.

Their are reasons why they might choose to do so, such as clearing out any duty to maintain any CRA updating reporting, or siimple good houskeeping.

Additionally, the CRA could choose to delete earlier than 10 years, which is a totally arbitrary date, so you never know then it will disappear.

I could come in the middle of a future credit app process.

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Good info, thanks!

[Walt_K]

You're assuming that there are no new accounts added to your report in the next 10 years.  It is very possible you will add additional credit sometime in the next decade, in which case the age of that CC you closed may shift from being below your AAoA to above your AAoA.  

[SuperKirby]

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@Walt_K wrote:

You're assuming that there are no new accounts added to your report in the next 10 years.

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Correct...