topic Re: Question about AoA and opening/closing accounts in Credit Cards

Question about AoA and opening/closing accounts

kc12286 — Mon, 20 Jun 2011 12:37:41 GMT

I know AAoA changes when you open and close an account. So if I wait to close an account that I've had since 06 and open a new account either with Discover or Citi, will it balance out? Might seem like a strange question. Hopefully someone knows the answer.

Re: Question about AoA and opening/closing accounts

DI — Mon, 20 Jun 2011 12:57:56 GMT

@kc12286 wrote:
I know AAoA changes when you open and close an account. So if I wait to close an account that I've had since 06 and open a new account either with Discover or Citi, will it balance out? Might seem like a strange question. Hopefully someone knows the answer.

The account will continue to report for up to 10 years after closing it. Closing an account doesn't immediately affect your AAoAs. Only opening an account has an immediate affect on your AAoAs.

Re: Question about AoA and opening/closing accounts

kc12286 — Mon, 20 Jun 2011 13:02:58 GMT

I guess I had it a little backwards than. Thanks. I was afraid that if I closed an account it would affect AAoA, so I was going to wait to close it. It will be at 0 when I close anyway.

Opening brings the AAoA down by 1 year, correct?

Re: Question about AoA and opening/closing accounts

visorboy1974 — Mon, 20 Jun 2011 13:32:14 GMT

@kc12286 wrote:
Opening brings the AAoA down by 1 year, correct?

Depends on the age of your other accounts.

Re: Question about AoA and opening/closing accounts

Walt_K — Mon, 20 Jun 2011 13:34:52 GMT

@kc12286 wrote:
I guess I had it a little backwards than. Thanks. I was afraid that if I closed an account it would affect AAoA, so I was going to wait to close it. It will be at 0 when I close anyway.
Opening brings the AAoA down by 1 year, correct?

No. It depends on what your AAoA is and how heavily weighted it is. Let's say you have only two cards that are 10 years old, you have an AAoA of 10 years. You add a new tradeline, you now have 3 cards with total age of 21 years (10 + 10 +1) and you have an AAoA of 7 years (21/3). So adding that one card dropped your AAoA by 3 years. That is because in this example, you don't have very many total tradelines to balance out the effect.

You'll have to figure it out based on your specific situation.

ETA: Third card would actually be zero years, not 1, so it would drop further, but you get the idea.

Re: Question about AoA and opening/closing accounts

kc12286 — Mon, 20 Jun 2011 13:44:56 GMT

I have an AAoA of five years. Oldest account is 20 years (I was an AU on two of my mother's Amex cards). But my question is, what's counted in AAoA, only open lines, active lines? Can a closed line with a balance be counted? I assume it would be because it still reports a balance until that's paid off.

Re: Question about AoA and opening/closing accounts

Walt_K — Mon, 20 Jun 2011 14:22:11 GMT

@kc12286 wrote:
I have an AAoA of five years. Oldest account is 20 years (I was an AU on two of my mother's Amex cards). But my question is, what's counted in AAoA, only open lines, active lines? Can a closed line with a balance be counted? I assume it would be because it still reports a balance until that's paid off.

FICO counts lines, opened or closed, in your AAoA regardless of whether there is a balance.

Re: Question about AoA and opening/closing accounts

kc12286 — Mon, 20 Jun 2011 14:25:23 GMT

Thanks Walt.

I take it, it's counted until the account falls off at the 10 year mark.

I think I'll take my chances and apply for the two cards I want (likely Discover More and Citi Forward) and close the one account that's not growing.

Re: Question about AoA and opening/closing accounts

Walt_K — Mon, 20 Jun 2011 14:28:35 GMT

If the account that isn't growing has no AF, consider keeping it open and not using it. But yes, it will remain on your report and count toward your AAoA until it falls off in 10 years (they sometimes don't fall off by the way).

Re: Question about AoA and opening/closing accounts

kc12286 — Mon, 20 Jun 2011 14:52:48 GMT

@Walt_K wrote:
If the account that isn't growing has no AF, consider keeping it open and not using it. But yes, it will remain on your report and count toward your AAoA until it falls off in 10 years (they sometimes don't fall off by the way).

It's only a $500 limit, they refuse to CLI without a hard pull, won't drop the APR of 14.24% AND the rewards are meh 1pt per $1 spent. I could keep it open like you suggested and just sock drawer it.