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AAOA and student loans??

Valued Contributor

AAOA and student loans??

Good mornin'...

 

My wife has three oustanding student loans from the US Dept. of Education.  In 2011, servicing was transferred to Direct Loans, and two of three CB's just wiped the history, showing them as opened in 2011.  They were opened in 2003.

 

As of late 2012 they are being serviced by Granite State management.  The Direct Loans accounts show as transferred/closed never late, and there are now three more new accounts under the GSM name.

 

If I plug this all into my spreadheet, the net effect is a dramatic change in her AAOA.  Her credit looks young, with a lot of new accounts, when her file is actually very old.  Am I calculating this correctly?  Will these accounts affect her AAOA and subsequently her score?

 

This happened with a home mortgage she had at one time as well.  Is there any correction built into the FICO algorithm to adjust for account transfers, or is AAOA really just that unmanageable?

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 1 of 7
6 REPLIES
Valued Contributor

Re: AAOA and student loans??

Nobody?

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 2 of 7
Super Contributor

Re: AAOA and student loans??

I believe this is usually what happens when accounts are transferred or sold ~ the old tradeline is closed out, and a new tradeline is opened with a new open date.

 

AAoA factors in all of the accounts on your reports, so unfortunately it can lower your AAoA.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 3 of 7
Valued Contributor

Re: AAOA and student loans??


pizzadude wrote:

I believe this is usually what happens when accounts are transferred or sold ~ the old tradeline is closed out, and a new tradeline is opened with a new open date.

 

AAoA factors in all of the accounts on your reports, so unfortunately it can lower your AAoA.


That's about what I figured.  It doesn't seem fair that she would be hit like that; it literally cuts her AAOA in half.

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 4 of 7
Super Contributor

Re: AAOA and student loans??

 

She must have a very thin file if it whammies her AAoA that much ~ you are counting both closed and open accounts in AAoA right ?

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 5 of 7
Regular Contributor

Re: AAOA and student loans??

When my loans were transferred to Mohela last May, they backdated the info to when my loans were originally opened, so my AAOA actually went up. It went for 3.x (so 3) to 5.6 (so 5). 

Current Cards: AMEX Everyday ($15k), AMEX BCE ($20k), Amex Platinum, Arrival ($11.5k), Merrill+ ($7.5k), Freedom ($5k), Double Cash ($6.5k)

2/16 - 864 Fico EQ (CITI); 818 Fico Ex (AMEX)
Message 6 of 7
Valued Contributor

Re: AAOA and student loans??

Yeah; the problem is it hit her double in the last couple of years, so she has six new loan accounts from what should have been old student loans, and one new mortgage account.   7 new accounts will whammy anyone, I think.

 

It will be fine...  Just whining I guess.

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Message 7 of 7