AAOA????

[Anonymous]

Does AAOA ever bottom out? Another words, whats the lowest ones AAOA actually be?

[Anonymous]

The lowest one's AAoA can be is 0 months.

AAoA gies up by exactly one month on the first of the month.  So suppose a person opens his very first account on Aug 3, and that account appears on his report a few days later. (Very rare for it to appear that quickly but possible.)  Then he will have an AAoA of zero months until Aug 31.

But if we assume we are asking what's the lowest a person can have and also have a true FICO score, then the person must have at least one account that is > 6 months old, and the problem gets more interesting.

Imagine we have a person with one account who waits till it is 6 months old (on the 1st).  Then he opens 12 more accounts on the 3rd and suppose they all appear on his report in a few days.  His AAoA will be 6 months / 13 which is < 0.5 months.  Is that rounded down to 0 months?  Is rounded up to 1 month?  I don't know.

A fair thing to say is that an AAoA of 1 month is the lowest it could ever be in practice, though perhaps one can imagine a very weird scenario where it would be 0 months.  Even an AAoA of 1 month is rare practically speaking

[Anonymous]

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@Anonymous wrote:

The lowest one's AAoA can be is 0 months.

AAoA gies up by exactly one month on the first of the month.  So suppose a person opens his very first account on Aug 3, and that account appears on his report a few days later. (Very rare for it to appear that quickly but possible.)  Then he will have an AAoA of zero months until Aug 31.

But if we assume we are asking what's the lowest a person can have and also have a true FICO score, then the person must have at least one account that is > 6 months old, and the problem gets more interesting.

Imagine we have a person with one account who waits till it is 6 months old (on the 1st).  Then he opens 12 more accounts on the 3rd and suppose they all appear on his report in a few days.  His AAoA will be 6 months / 13 which is < 0.5 months.  Is that rounded down to 0 months?  Is rounded up to 1 month?  I don't know.

A fair thing to say is that an AAoA of 1 month is the lowest it could ever be in practice, though perhaps one can imagine a very weird scenario where it would be 0 months.  Even an AAoA of 1 month is rare practically speaking

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Very good answer thank you. So to be more specific. If someone, I'm just picking numbers here has AAOA's at 2 years, the oldest account is 11 years and the newest account is 2 months. What is the lowest it can go if they continue accumulating accounts? Can it bottom out to 1 month? Thanks in advance CreditGuyInDixie.

[Anonymous]

Sure.  It could certainly go down to 1 month.  For example suppose you had six accounts total at an AAoA of 24 months (2 years).  That would be 24 months * 6 accounts = 144 months.  Suppose you had that age on August 2.  Then on Aug 3 you successfully opened 140 new accounts in one day.  Furthermore assume all 140 made it onto your credit report in the next week.  (Both things are wildly improbable but they are conceivabale.)

In mid-Aug, the 140 new accounts would each be exactly 0 months old each.  Therefore your AAoA would be....

144 months / (total number of accounts) =

144 / 146 =

0.9986 months

Or just a hair under 1 month.

[Anonymous]

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@Anonymous wrote:

Sure.  It could certainly go down to 1 month.  For example suppose you had six accounts total at an AAoA of 24 months (2 years).  That would be 24 months * 6 accounts = 144 months.  Suppose you had that age on August 2.  Then on Aug 3 you successfully opened 140 new accounts in one day.  Furthermore assume all 140 made it onto your credit report in the next week.  (Both things are wildly improbable but they are conceivabale.)

In mid-Aug, the 140 new accounts would each be exactly 0 months old each.  Therefore your AAoA would be....

144 months / (total number of accounts) =

144 / 146 =

0.9986 months

Or just a hair under 1 month.

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I have to hand it to you CreditGuyInDixie, you are the ace with this stuff and have taught me a lot. Your knowledge is appreciated!

[mitchblue]

Now I'm wondering if anyone has opened up 140 accounts in one day.. That's a lot of work.

[Anonymous]

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@mitchblue wrote:

Now I'm wondering if anyone has opened up 140 accounts in one day.. That's a lot of work.

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I did call it "wildly improbable."  :-)

If somebody is willing to do the legwork, possibly using a tool like ABCD's spreadsheet, it would interesting to see how the following scenario would play out:

*  We start by assuming that somebody has a profile with six open accounts (no closed accounts) and an AAoA of exactly 2.0 years, as of Jan 2.

*  Then we assume that he adds six new accounts every year, in mid January.

*  Three of those new accounts are cards he will keep forever.

*  Two of them are cards he closes in December (approx 11 months later) to avoid an annual fee.

*  One of them is a 48-month loan.

*  All of the new accounts will appear on his reports in Feb/March.

*  After any account closes, it stays on his report for 10 years.

It would be interesting to hear what the person's AAoA is for each year, over the next 30 years, with the AAoA being computed in April (roughly its lowest point for the year).

The scenario described above is a pretty fair description of somebody who likes to open a fairly heavy number of accounts each year.  It gets at what Donny may have been asking from a practical point of view.  I.e. if somebody is opening a lot of accounts, what is the lowest his AAoA is likely to go, assuming no wildly unlikely corner cases like opening several dozen accounts in one month.

[Anonymous]

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@Anonymous wrote:

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@mitchblue wrote:

Now I'm wondering if anyone has opened up 140 accounts in one day.. That's a lot of work.

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I did call it "wildly improbable."  :-)

If somebody is willing to do the legwork, possibly using a tool like ABCD's spreadsheet, it would interesting to see how the following scenario would play out:

*  We start by assuming that somebody has a profile with six open accounts (no closed accounts) and an AAoA of exactly 2.0 years, as of Jan 2.

*  Then we assume that he adds six new accounts every year, in mid January.

*  Three of those new accounts are cards he will keep forever.

*  Two of them are cards he closes in December (approx 11 months later) to avoid an annual fee.

*  One of them is a 48-month loan.

*  All of the new accounts will appear on his reports in Feb/March.

*  After any account closes, it stays on his report for 10 years.

It would be interesting to hear what the person's AAoA is for each year, over the next 30 years, with the AAoA being computed in April (roughly its lowest point for the year).

The scenario described above is a pretty fair description of somebody who likes to open a fairly heavy number of accounts each year.  It gets at what Donny may have been asking from a practical point of view.  I.e. if somebody is opening a lot of accounts, what is the lowest his AAoA is likely to go, assuming no wildly unlikely corner cases like opening several dozen accounts in one month.

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Exactly, CreditGuy.

[Anonymous]

Maybe we'll get lucky and somebody will do that for us.  It would be a little bit of work, but it would be cool to see how it would work out.

I am pretty sure that by year 15, after the new accounts started falling off each year in a kind of rhythm, we'd see the AAoA stabilize.  Probably would be going up like 6 months every year.  Can't really know until somebody works it out on a spreadsheet.