Average age of accounts?

[Anonymous]

Ok, I read through some past postings about this and am still confused.

1) The longer the average age, the better, right?

2) Do you simply add up how long each account has been opened and then divide by total of accounts?

3) Let's say you opened an account 05/2005 and closed it 08/2005, do you add 3 months for that account's age or add 3 years? Or none of the above?

4) Pubilc records and collections do not count, but charge-offs do?

[WhirledPeasPlease]

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sidewinder wrote:

Ok, I read through some past postings about this and am still confused.

1) The longer the average age, the better, right?  Yes.

2) Do you simply add up how long each account has been opened and then divide by total of accounts?  Yes, easiest to do using months -- 15 months, 27 months, 145 months and divide by three.

3) Let's say you opened an account 05/2005 and closed it 08/2005, do you add 3 months for that account's age or add 3 years? Or none of the above?  36 months.

4) Pubilc records and collections do not count, but charge-offs do?  I think you're correct, but this is just gut instinct.

[Anonymous]

Thanks.

How much does a short average age hurt score? I know history counts for 15% of your score,but is that overall history(longest account) or average age or a combination of both?

I listed out all my accounts in Excel and calculated age in months.

For TU I have  11 accounts(inc. in age), oldest is 2 years this month, average age is 6.63 months

For EX I have  16 accounts(inc. in age), oldest will be 7 years in Sept, average age is 19.38 months

For EQ I have  29 accounts(inc. in age), oldest will be 7 years in Sept, average age is 21.10 months

Last I checked my scores from highest to lowest was TU, EX, EQ.

TU is missing my oldest account that was closed in 2005 with multiple 30/60 day lates, a charge off from 2004, and has only 2 collections. 1 will fall in September, other is Midland and hope to come off soon.

EX has a charge off and 3 collections. 1 is Midland, other 2 should be coming off anytime as well.

EQ has a charge off and the same 3 collections that EX has.

So, I think I am at an advantage on TU for missing my oldest account and penalized on EQ even more for too many accounts. The number of accounts on EQ, with collections is 32.

[Anonymous]

affects my scores about 4 points for every average age year.

[WhirledPeasPlease]

Side --

Do the numbers/averages you get jive with the numbers on your "understanding your FICO" page?

I'll have to rethink the rest of what you typed -- at the moment all I can think of is that you're going to get dinged for a long while with the short history thing.  My average age just hit 6 years and finally switched from 'short' to 'established' on TU.  Your avg ages are all over the place depending on the bureau and I'm overwhelmed! 

I'll try to post my basics and see what you take from it..

EQ 672:   Accounts=27  Lates=10  Collections=2  Inq=1  AvgAge=5+

EX 653:   Accounts=42  Lates=20 Collections=0  Inq=7  AvgAge=5+

TU 675:   Accounts=40  Lates=17  Collections=1  Inq=0  AvgAge=6

All derogatory information is past the 3 year point.  Whew.

Hope this helps!

P

[fused]

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sidewinder wrote:

4) Pubilc records and collections do not count, but charge-offs do?

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PRs and collections never factor in credit history length or average-age of accounts. CO's, repos and foreclosures can factor in only if they are being reported as a derog TL.

[RobertEG]

It is NOT how long an account was open, it is how long since it was opened, as long as it continues to appear in your CR. 

An account opened in May '05 counts as three years of history now, regardless of when it was closed.  Closing the account will normally cause it to drop from your CR only after ten years from clsoing date, and its lenght continues to average into your age until then.  But upon closing, it  loses the CL on that TL. That is what you stand to lose. in the short term.  FICO is a multi-category game.

PRs are not TLs, and thus are never included in length of credit.  Collections sometines are based on a prior TL, and if so, they follow the same rules for credit history as any other TL as to length of credit, regarldess of their staus as having gone into collection.  A collection thar rears its head due to alleged non-payment of, for example, a prior medical bill that did not involve a TL of credit, will have no affect on lenght of credit hiistory, for it is not based on a credit consideration.  All collections ding you in the more serious, and separate category, of payment history (35%) and not length of credit (15%).

Message Edited by RobertEG on 05-18-2008 08:36 PM

Message Edited by RobertEG on 05-18-2008 08:39 PM

Message Edited by RobertEG on 05-18-2008 08:41 PM