topic Re: Credit Age in Understanding FICO® Scoring

Credit Age

HO8X7696 — Wed, 16 Nov 2022 21:22:06 GMT

Hello, I was wondering when it comes to your credit age and closed accounts, how is that calculated? If you have 5 total amounts (1 closed, 4 open) do you add up all the months and just divide by 5? Or do you not count the closed account? Also for the closed account, you just use the length of time it was open correct? For example if you opened an account 5 years ago but it was closed after 9 months, you would just use 9 months right?

Sorry if my question is dumb I just like to set goals. So I want to understand how the scoring for credit age is handled.

Re: Credit Age

Revelate — Wed, 16 Nov 2022 21:53:32 GMT

You absolutely count closed accounts for aging metrics and what you described is close to the AAOA calc (there's a rounding funciton in it too) for FICO.

VantageScore is sorta unknown, basically everyone says for that score closed accounts don't count, but I've never seen an actual datapoint that demonstrates that concretely and I don't think there's a bureau disclosure on it.

Re: Credit Age

SouthJamaica — Wed, 16 Nov 2022 21:51:45 GMT

@HO8X7696 wrote:
Hello, I was wondering when it comes to your credit age and closed accounts, how is that calculated? If you have 5 total amounts (1 closed, 4 open) do you add up all the months and just divide by 5? Or do you not count the closed account? Also for the closed account, you just use the length of time it was open correct? For example if you opened an account 5 years ago but it was closed after 9 months, you would just use 9 months right?

Sorry if my question is dumb I just like to set goals. So I want to understand how the scoring for credit age is handled.

As @Revelate said, in FICO closed accounts which still appear in your reports continued to be factored into the aging metrics. And the age that is used is the entire age from inception.

Re: Credit Age

Zoostation1 — Thu, 17 Nov 2022 04:09:08 GMT

In terms of VantageScore DPs, I can't speak for credit cards closed, but when a long since student loan negative (settled for principal and erased the other fees, marked paid as agreed) fell off my credit report in January 2022 I had a significant drop in VS3.0 scores (at that moment I had no FICO score but that's discussed in another thread).

Re: Credit Age

FireMedic1 — Thu, 17 Nov 2022 12:25:17 GMT

If you dont have a CMS that shows your true FICO AAoA's. Here ya go:

https://aaoa-calculator.org/

Re: Credit Age

Revelate — Fri, 18 Nov 2022 10:18:42 GMT

@Zoostation1 wrote:
In terms of VantageScore DPs, I can't speak for credit cards closed, but when a long since student loan negative (settled for principal and erased the other fees, marked paid as agreed) fell off my credit report in January 2022 I had a significant drop in VS3.0 scores (at that moment I had no FICO score but that's discussed in another thread).

Except falling off one's report would affect aging metrics in FICO as well.

I guess the righteous test for VS would be if someone (*cough* I guess I could've done this) closed a slew of cards and saw what it did to one's Vantage on CK or Synchrony.

Ultimately I'm not sure it matters much, FICO and VS look at the same data albeit slightly differently, being optimized for FICO (never miss, never late, pay down your revolving debt) is going to be so close to optimized for VS anyway it doesn't rationally make any difference. As is there's basically nothing in the credit market which underwrites higher than a 760 FICO anyway, likely will be a similar line on VS don't have to be perfect.