revolving credit history

[Anonymous]

I have a question that I have been unable to find an answer to.  I pulled my credit report and where it explains the problems with my credit it says that I have not established a long revolving credit history.  It said my revolving credit history was 4 years and 8mos old. My question is, 'how long does it have to be before this is no longer a negative?' I am tryng to repair my credit and the information on this forum has been fantastic, but this was the one negative I am not sure how to deal with. Thanks for any help you can give me.

[Anonymous]

.Only time will take care of this...and NOT applying for new credit which will lower your AAofAs. 

You'll want to check out this sticky on high achievers.  I believe it says that high achievesr average age of accounts is 6 yrs. Oldest account 19 yrs.

.http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=12673

[haulingthescoreup]

The comment that we collected and posted on the High Achievers thread says this:

-- oldest revolving account: FICO High Achievers opened their first revolving account 19 years ago, on average.

However, I doubt that you will have to wait 15 years for this to go away.

Was the the first comment, third comment? They are listed in order of importance in their effect on your scores.

[Anonymous]

It was the third.  I last pulled my credit report in March and will pull it again in May.  The first was late payments.  It has now been over 6 months since my last late payment and I know with time that will improve.  The second thing was the ratio of my revolving credit limit.  I only have one credit card, and I have brought down that balance and will have it payed off in two months.  I am confused because it says I have my established credit is good,oldest account is 13 years and 5months and the average age of my accounts is 6 years.  I also saw that the oldest account was 19 years and the average age was 6 years for high achievers, so does that mean I have to wait till I've had my credit card 6 years before it will no longer be a negative?  I have not made any inquiries in over 2 years so that is not a problem.  I would like to purchase a bigger house next year so I don't want to open any additional credit between now and then.

[haulingthescoreup]

It sounds like your older accounts are all loans or mortgages, maybe open, maybe closed, and the oldest revolving (CC) account is 6 years-something.

My kids don't kid get this message, and certainly their oldest revolving accounts aren't older than yours. I'm guessing that it's the combo of long-ish installment and not-so-long revolving history. Also, since it's the last comment of three, I wouldn't pay a lot of attention to it. The recent late and high util are the biggies.

I applaud your conservative approach to your credit, but I would highly recommend opening at least one more CC, preferably with a different bank/ credit union. Management of revolving credit is a bit portion of FICO scoring, and it would help to have one or two additional cards. You can put some sort of automatic payment on each and never carry them (we call this "sock-drawering".) This keeps the card alive, but you don't have to keep track of a lot of stuff. Just be sure to pay the bill each month, just as you are sure to pay your cable bill, cell phone bill, and so forth.

Message Edited by haulingthescoreup on 04-27-2009 07:36 PM

[Anonymous]

I would think that it's possible the AAoA being 6 years is more important than the oldest account being 19 years old.  On TU, which of the 2 CR's is the only one that has any negatives listed, my AAoA is 6 years, but my oldest account is only over 10 years old.  And that point is on my positive side.  The negative on mine actually has to do with seeking new credit, since I have 3 inquiries on TU, and 1 new credit card that's just under 6 months old.

[haulingthescoreup]

They seem to vary on reports. I have the same experience as you, in reverse, so to speak: 19y 10m for oldest account; 4y AAoA, and it's listed on the negative side.

I think OP's history is basically fine. Besides the late and the util, the only thing being carped about was length of revolving history, and IMO, that's one of those scraping-the-barrel comments that we sometimes see. It didn't say the history was too short, just the revolving history, so I'll bet it doesn't influence the score much at all.

Not disagreeing with you at all, btw; I was re-reading the High Achievers characteristics, and some of those comments you just hardly ever see, including this one.

Message Edited by haulingthescoreup on 04-25-2009 12:58 PM

[Anonymous]

Okay, confused again.  Wouldn't getting another cc lower my AAoA even more?  Since I only have the one card, wouldn't that end up hurting me even more than the benefit of addtl avail cr?  Sorry, I used to think I was smart until I decided to try to fix my credit!

[haulingthescoreup]

Sometimes you have to take a step backward to be able to take several steps forward. And you're not being criticized for AAoA; you're being hit for (longest) history of revolving credit.

There's nothing you can do about the longest history, at least, not without a time machine. But you could definitely stand to diversify your credit profile a bit, and also protect yourself from wacko behavior by your one card.

I would advise, though, that you figure out your AAoA in years and months. The 6 years on your report might mean barely six years or almost seven. The rule of thumb is that you don't want to drop your AAoA by more than a year if you can possibly help it. To do this, figure out the age in months of ALL the accounts on your reports, whether open or closed. First figure the years and multiply by twelve to translate into months, and then add the number of months. So an account opened in January 2002 would be 7 years (=84 months) plus 3 months for a total of 87 months (almost 88.) Do that for every account, add them up, divide by the number of accounts to get the average in months, then divide again by twelve to get the average in years. That's your current AAoA. Now take the total number of months and divide by the number of accounts plus 1 (representing a new account), and divide again by 12. If you stayed at 6-something, I think you'll be helped by adding another CC, from a different bank.

The FICO High Achievers thread indicates that most of these mythical beings have about 3-4 open cards. As revolving drives your scores so strongly, it's worth a temporary hit in your AAoA to fatten the revolving portion of your credit up a bit.

At any rate, your AAoA has nothing to do with the ding about length of revolving history. And obviously, the big factors that are driving your scores are the recent late and the high util. Time will fix the first, and payments will fix the second. IMO, the "length of revolving history" bit is a far distant third in things affecting your score. Fix your util, and let the late hit one year old and then two years old, and you'll be in great shape.

Have you tried GW'ing (goodwilling) the late, btw? If you could get that off, it would do wonders.


edited for typos --attempting to post while being assaulted by a 16-pound cat who wants to be petted, NOW.

Message Edited by haulingthescoreup on 04-27-2009 08:00 PM

[Anonymous]

You are amazing!  I did as you said, added my accounts and the difference was 4 mos so the AAoA wldnt change! Just checked my score, from 644 in Mar to 681 today!  This forum is the best thing I ever found.  Thank you so much.  Now, I have to find a good cc offer.