@Anonymous wrote:
I’ve tried to find definitive answers to these questions, but I have not had any luck.
1) When FICO looks at your average age of accounts does it include closed accounts? Would closing my most recently opened account increase my average age of accounts?
2) If not, does anyone know if an “average age of open accounts” is a factor in the score?
3) If closed accounts are still calculated in the average age of accounts, do closed account still age until they fall off of your credit report or is the age of a closed account only calculated for the amount of time the account was open?
Any insight into how this is calculated would be helpful.
Thanks!
Welcome to the forums.
1) When FICO looks at your average age of accounts does it include closed accounts? Your AAoA is the sum of the ages of every account on your report, whether open or closed, calculated in months, divided by the number of accounts and then divided by 12. This is measured from the time each account was opened until present.
Would closing my most recently opened account increase my average age of accounts? A newly opened account is immediately factored into the AAoA and stays there for up to 10 years so it will continue to add to AAoA for that time period which helps you. Just closing it won't remove it.
2) If not, does anyone know if an “average age of open accounts” is a factor in the score? As I said the AAoA calculates all accounts both open and closed. The length of credit history is 15% of your total score.
3) If closed accounts are still calculated in the average age of accounts, do closed account still age until they fall off of your credit report or is the age of a closed account only calculated for the amount of time the account was open? Closed accounts in good standing will factor into AAoA for up to 10 years. Derogatory accounts will remain for varying amounts of time:
Monthly delinquencies under an OC account drop at 7 years from their individual date of delinquency. FCRA 605(a)(5). The date of first delinquency (DOFD) has nothing to do with these drop-off dates. They drop from their own individual dates. So look at each prior OC reported monthly derog date, and simply add 7 years.
If the OC subsequently reports their account as a charge off, that is a totally different and additional post to your CR. Their post as a charge-off will remain in your CR for 7 1/2 years from the DOFD on the OC account, which is the first 30-day delinquency you had on the account, and disregards any later 60/90+ delinquencies that followed. That is one single date-certain, and cannot be reset. FCRA 605(c).
If the OC then refers the account for collection, and a CA posts to your CR, the drop-off date of their collection reporting is the same as that of a CO. It is 7 1/2 years from the same DOFD on the OC account, and the CA cannot reset this date. Again, FCRA 605(c).
Bankruptcies: 7 years for completed Chapter 13 and 10 years for Chapter 7.
Foreclosures: 7 years
Public record: Generally 7 years, although unpaid tax liens can remain indefinitely.
