will closing my youngest card actually improve my score?

[09Lexie]

Here's an excellent thread regarding rebucketing

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Rebucketing/td-p/1448458

[notfancy]

That is a really nice thread. Thank you for bringing it to attention, Lexie!

[user5387]

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@wiivile wrote:

I'm not sure if opening this new card actually helped or hurt my score in the end. It nearly doubled my overall credit limit, but reduced my average age of accounts from 4 years to 1.5 years (not to mention the hard pull).

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I don't see how opening a single card can reduce AAoA from 4 years to 1.5 years.

In the worst case, if you have a single card with a 4-year history, and open another one, then the AAoA would be 2 years.  If you open two cards, then the AAoA would be 1.3 years.

If an account is deleted, then the AAoA can jump around in an arbitrary way.

[guiness56]

I agree.  If you have AAoA of 4 years and open another one, your AAoA would be 2.5 years rounded down to 2.

[user5387]

I believe that if you have an AAoA of 4 years across N cards, then adding another will reduce the AAoA to:

   (4 * N) / (N + 1)

If N = 1, then the new AAoA will be 2.0, and if N = 10, the new AAoA will be 3.6.

[guiness56]

If you have one card that is 48 months and add another one that is 1 month that is 49 months.  Divide that by the number of cards and it is 24.5 months.  Since AAoA is rounded down, it would be 24 months.

If you have one that is 48 months and add another that is 0 that would be 24 months.

You count all the months from the date opened.  If it equals a month you add it, if it doesn't equal 1 month you add 0.