Average Account Age Calculation

[Junejer]

If possible, I would say PIF all but one card and keep a 1-9% uti on it...rotate the cards around to keep all happy.

[Anonymous]

Has anyone been able to average the length of time of each of their accounts and arrive at the same number that is reported? I have open, closed, and revolving accounts, and I have gone through each account in my credit report and tried averaging them a number of different ways but have not yet arrived at the "Average Account Age" reported by Equifax. There are a couple credit cards I have never used and I tried excluding these but I still don't arrive at the right number.

[Anonymous]

Yes-

Use ALL accounts-

Copy into Excel and AVG the open date

Current date - avg open date= Avg age  

Format the cell yy mm

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inquisitive24 wrote:
Has anyone been able to average the length of time of each of their accounts and arrive at the same number that is reported? I have open, closed, and revolving accounts, and I have gone through each account in my credit report and tried averaging them a number of different ways but have not yet arrived at the "Average Account Age" reported by Equifax. There are a couple credit cards I have never used and I tried excluding these but I still don't arrive at the right number.

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[ChuckG]

Sorry to thread hijack here but on this topic maybe some of the experts on this thread can shoot me an opinion on these two things.

Am I likely to see much of a fico score hit by refinancing a 1 year old auto loan? My average age of accounts is 5 years on TU, 10 on EQ and 12 on EX.

Also, on the subject of account age. I was rebuilding with 3 subprime, low limit credit cards. All of them cost me a grip to get going 2-400 each in initial fees. Now that I have obtained 2 prime cards, I cancelled one of the SPs (it had a $13/mo account maintenance fee), Should I drop the other two as well? Or just sockdrawer them to bolster my credit age? (one has a $7/mo fee, the other one only has annual fees,they are about 6 months old and together only account for about 5% of my available revolving credit now.)

[RobertEG]

Inquisitive, try this.  It is what I read somewhere (cant remember where) about the FICO algoirthm for generating avg account age, and when I do this, it hits the number on the head for me.

My understanding is that FICO first  "rounds down" the age of each TL before calculating total avg score.  Thus, try ignoring any decimal, and use just the years (e.g.,  8.1 years or 8.9 years are both first rounded to 8.0).  Give that a go/

Message Edited by RobertEG on 05-27-2008 05:03 PM

Message Edited by RobertEG on 05-27-2008 05:04 PM

[Anonymous]

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RobertEG wrote:

Inquisitive, try this.  It is what I read somewhere (cant remember where) about the FICO algoirthm for generating avg account age, and when I do this, it hits the number on the head for me.

My understanding is that FICO first  "rounds down" the age of each TL before calculating total avg score.  Thus, try ignoring any decimal, and use just the years (e.g.,  8.1 years or 8.9 years are both first rounded to 8.0).  Give that a go/

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Average age is measured in months, not years.  Yes, the formula rounds down, but it rounds down to the nearest month.

[RobertEG]

In the last two years that I have been receiving scores and summaries, I have never seen avg age  expressed in years and months, only years.  Yes, age of oldest account is in years and months, but not avg age.

I will go back and try to find where I read that the FICO algorithm rounds down before it averages, for I am sure that I read that.

[Anonymous]

Robert, I am looking at my credit report from EQ which I just got last month and it has an Average Account Age expressed in years and months. Perhaps yours has been averaging to an exact number of years so that months is not necessary?

Timothy, thanks for the info, I have calculated an average using all of my accounts, and I do not get the same number. There are several points that are still unclear, though. For closed accounts, I have been taking the difference between the open date and close date for each of those accounts, because obviously I cannot take the difference between the open date and the current date. There is also the question of whether to use the open date and the current date or to use the Months Reviewed field for each TL.

I have arrived at the exact answer using an average of the SHORTEST and LONGEST accounts, which is different than my reported OLDEST and NEWEST accounts, using the Months Reviewed for each of these 2 TLs. I do not know if this is a fluke or the correct procedure. Has anyone else observed this in their calculations?

[Anonymous]

You must use the open date on ALL accounts (open or closed) to TODAY -

"because obviously I cannot take the difference between the open date and the current date." Yes you do- you get all that time after they are closed until they drop off-  

I use the 1st of each month to keep it simple (even though some CRA's are more exact) 

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inquisitive24 wrote:
Robert, I am looking at my credit report from EQ which I just got last month and it has an Average Account Age expressed in years and months. Perhaps yours has been averaging to an exact number of years so that months is not necessary?

Timothy, thanks for the info, I have calculated an average using all of my accounts, and I do not get the same number. There are several points that are still unclear, though. For closed accounts, I have been taking the difference between the open date and close date for each of those accounts, because obviously I cannot take the difference between the open date and the current date. There is also the question of whether to use the open date and the current date or to use the Months Reviewed field for each TL.

I have arrived at the exact answer using an average of the SHORTEST and LONGEST accounts, which is different than my reported OLDEST and NEWEST accounts, using the Months Reviewed for each of these 2 TLs. I do not know if this is a fluke or the correct procedure. Has anyone else observed this in their calculations?

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[haulingthescoreup]

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@RobertEG wrote:

In the last two years that I have been receiving scores and summaries, I have never seen avg age expressed in years and months, only years. Yes, age of oldest account is in years and months, but not avg age.

I will go back and try to find where I read that the FICO algorithm rounds down before it averages, for I am sure that I read that.

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Your FICO report might not display it in years and months, but as others pointed out, the EQ report displays it. I'm sure they know what the real average is. I doubt that it even rounds. I'd say that it just displays 3 years, until it's four years and so forth. That's how it always was on my FICO reports.

Why wouldn't anyone want to know the average in years and months? That's much more informative than years only. For instance, my average age has sunk to 3 years, 3 months. That is much more informative than 3 years. If it were 3 years, 11 months, I could console myself with the knowledge that I'd be back where I used to be in 13 months, rather than in 21 months.