10% New credit

[Anonymous]

When you look at a pie chart of how the credit score is calculated, it mentions 10%  new credit. I have heard this explained that it means you should open up a few new accounts every year to help your score. I think it may have more to do with not having too much new credit. Can someone explain what this means?

Thanks

[llecs]

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lrand wrote:

When you look at a pie chart of how the credit score is calculated, it mentions 10%  new credit. I have heard this explained that it means you should open up a few new accounts every year to help your score. I think it may have more to do with not having too much new credit. Can someone explain what this means?

Thanks

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Opening new accounts every year will hurt and not help your score. New credit is basically the damage you receive when apping for credit (inquiries), opening new TLs (I lose an avg. of 20-25 pts per new CC), and taking a hit in your AAoA if that drops by a whole number.

[Anonymous]

Thank you for confirming,

I didn't think it sounded correct.

[Anonymous]

What does AAoA stand for?

[Lel]

AAoA = Average Age of Accounts.

[Anonymous]

Thank you

[RobertEG]

Average age of accounts is:

Add up the time from the opening date of each account in your CR (open and closed) until today, and divide that by the number of accounts.  That is your AAoA.

[Anonymous]

Thank you!!