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Real effect of Low AAoA

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taxi818
Super Contributor

Real effect of Low AAoA

Hello all. Ive been knocking my head against the wall really trying to understand fico for a while.Just when i think i have it figured out. no way. So Currently, All of my Scores are correct as of today in my signature. What im trying to understand is when will i start earning points to my score based on AAoA. I have absolutely 0 points according to every model i have seen. I mean 0.But every simulator also suggest to expect a 60-70 point boost in the next 9 months. I just don't see how that is possible. My oldest account currently is 22 months old. My AAoA is 11 months. Should i expect a boost at the 1 year mark? i know how about as time goes on. I know its 15 percent of fico. But if i could just get 2 percent of it. I would be happy.  every other aspect of my report is clean. util 11 percent. no negatives. 100 percent ontime. Any advice. im too scared to app for anything as i want the AAoA to be over a year next month. Thanks all in advance for advice

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12 REPLIES 12
Anonymous
Not applicable

Re: Real effect of Low AAoA

Honestly ask yourself why would you need to apply for another card considering you've open 16 in less than two years? That is close to a new card every other month.

 

You clearly understand the Fico system to a large degree. And the very fact you're posting this asking for insight is your insight. Don't apply for anything else for the next 6-12 months. Let your AAOA grow. Your scores are also effected by those inquiries and that's assuming that you have been approved for everything you applied for and have not applied for any installment loan. Additionally I going "to assume" that everything you were approved for was for just one HP. And that is highly unlikely since I see at least two Cap1 cards.

 

Get your util % between 1-9%. Let only 1 card report a balance.

 

Let your stuff age and don't app for some time. You should be too scared to app any further!

 

P.S. You're doing great!

Message 2 of 13
taxi818
Super Contributor

Re: Real effect of Low AAoA

Well you're right when it comes to credit cards. But I need a small car loan in a couple months. Hoping with the 1 year mark of AAoA I get s boost. Looking for loan between 14-20k not a lot Smiley Happy
Message 3 of 13
Anonymous
Not applicable

Re: Real effect of Low AAoA

An installment loan (car loan) will actually help your score in time because it add to the mix of credit you have.

Message 4 of 13
taxi818
Super Contributor

Re: Real effect of Low AAoA


@Anonymous wrote:

An installment loan (car loan) will actually help your score in time because it add to the mix of credit you have.


when i first started my rebuild 22 months ago. I got installment loan. paid it off in 6 months as it was saying my loan ratio was too high always.

Smiley Sad any way. i currently already have and installment loan. i borrowed 5k from my credit union back in march. balance down to $4072.00. i can't see how it is helping my score. Every model says installment loan to or non mortgage loan high. i take that to mean my utilization is high on my loan. which is kind of nonsense since ive only had the loan 5months. of course i still owe more that 75% this is a 4 year loan with automatic payments directly out of my checking account. So i don't know if these will help when i comes time to get a car loan.

Im only really looking at the AAoA because this is where my biggest failure is. like i said before. 11months. but im hoping at 1 year mark i will start earning at least a cou0ple points in this catagory as well when my oldest account becomes 2 years old. which will happen in october. And im willing to put 2k down on a car to help the process.

Message 5 of 13
savingmoney87
Regular Contributor

Re: Real effect of Low AAoA

Yes, having a credit mix of an installment loans and CC is beneficial by having diversity in accounts types. The reason why you see the balance of installment loans too high on your credit report is because it's new. Once you pay a significant portion of that installment down, I'd say 30% but I've seen other variations it will help give you boost. I'm not sure how much because each profile is different. For example, when I first got my car loan, it keep saying "balance of installment accounts too high" after 2 years it went away and my score got a boost. Once I paid it off, I immediately lost points. Now, I've gotten another car loan, guess what "balance of installment accounts too high." 

 

Don't worry, I think you are doing great. To be honest, from your signature line I would say you are GOOD TO GO! Don't get any new accounts after your car loan. Then sit back and patiently wait for 12 months to allow all your other inquiries to fall off. I think waiting is the hardest thing. 

 

Right now, I'm in the garden until June 2016 and hopefully longer. 





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Message 6 of 13
ddemari
Super Contributor

Re: Real effect of Low AAoA

All of my reports the third negative hurting my score is installment balances are too high. but, installment balances are weighed much differently than out credit products, I think that reason code is standard for a lot of people with installment loans. Like we need to tell you something negative, so here it is. 

Message 7 of 13
taxi818
Super Contributor

Re: Real effect of Low AAoA

For sure I don't need s credit card. Yes I can let every thing age once I get the. At loan. In fact. I plan on staying away from fico a while. Just letting things age. But car loan is crucial
Message 8 of 13
Anonymous
Not applicable

Re: Real effect of Low AAoA

Don't let the stupid line about your installment loan bother you. It is going to be high since it's a new loan. It bothered me when I got my Jeep at the end of last year. it is what it is. If that's your biggest Fico negative, then you're doing well. 

Message 9 of 13
jamie123
Valued Contributor

Re: Real effect of Low AAoA

Like the other posters mentioned, you will get a small bump once you are over one year in AAoA.

 

You really do need to quit apping for new credit for a while. You will gain nothing point wise or otherwise with more credit cards. Once you get to 2 years AAoA you will be golden and your scores will rise dramatically.

 

Then when you app for new CCs you will be getting large starting CLs!


Starting Score: EQ 653 6/21/12
Current Score: EQ 817 3/10/20 - EX 820 3/13/20 - TU 825 3/03/20
Message 10 of 13
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