topic Re: Calculating Average Account Age in Understanding FICO® Scoring

Calculating Average Account Age

Nick777 — Fri, 01 Jun 2007 19:38:05 GMT

I am aware that the average age of your accounts is a factor in your credit score. However, what type accounts are included in this average age, specifically: Are all credit card accounts included or are there some cards which are excluded? Are mortgages, student, auto or other installment loans included? Are closed accounts of any type included, or just open accounts? I'm managing my mother's accounts, and she has 11 CC and numerous other accounts. It appears that cancelling some of the new CCs would increase the average age of the CC accounts, but I don't know if anything else gets factored in. Any help is appreciated. Thanks!

Re: Calculating Average Account Age

Tuscani — Fri, 01 Jun 2007 20:47:20 GMT

All TLs count against age. Don't cancel accounts unless they are costing you money.

Message Edited by Tuscani on 06-01-2007 03:47 PM

Re: Calculating Average Account Age

Nick777 — Fri, 01 Jun 2007 21:02:42 GMT

Just to clarify - even closed TLs count against age; therefore it does not matter whether a TL is open or closed when age is calculated?

Re: Calculating Average Account Age

Anonymous — Fri, 01 Jun 2007 21:22:42 GMT

Nick777 wrote:
Just to clarify - even closed TLs count against age; therefore it does not matter whether a TL is open or closed when age is calculated?

If the score was calculated on the very day that a TL was closed -- then no, it wouldn't matter. But it's unlikely that will happen.

Age is your friend. The score takes into account the age of the oldest TL -- so you don't want to close your very first CC. It also takes into account the average age of all accounts -- so you don't want to close a bunch of accounts.

Re: Calculating Average Account Age

MidnightVoice — Fri, 01 Jun 2007 21:36:57 GMT

Nick777 wrote:
Just to clarify - even closed TLs count against age; therefore it does not matter whether a TL is open or closed when age is calculated?

According to EX, that does not appear to be the case. There seem to be two measurements - when the first account was opened is one. But they seem to be using my active TLs to calculate the length of my credit history. Hence the one active card that does not report to them (out of 4) makes a huge difference to the average. Whereas that one card out of all my cards would have no impact on the average age.

I might be confused here, but that is what the averages say

Message Edited by MidnightVoice on 06-01-2007 04:36 PM

Re: Calculating Average Account Age

Tuscani — Fri, 01 Jun 2007 21:37:21 GMT

As far as age is concerned... only open TLs count.. Util, payment history, ect. still count on closed TL, however.

Re: Calculating Average Account Age

Anonymous — Tue, 28 Aug 2007 17:13:51 GMT

Question. If I have 1 credit card from 9 years ago that was open for 2 months, does that add 2 months in to average age or 9 years?

Re: Calculating Average Account Age

fused — Tue, 28 Aug 2007 18:53:12 GMT

Tuscani wrote:

As far as age is concerned... only open TLs count.. Util, payment history, ect. still count on closed TL, however.

I have to disagree with you on this one! I have an old, closed AU TL reporting on EQ and TU and they have done two things: significantly raised my credit length history and average-age of my accounts. EX does not report this TL so my credit length history and average-age of accounts is much shorter and my score seems to reflect this.

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=4402

Message Edited by fused111 on 08-28-2007 08:53 AM

Re: Calculating Average Account Age

smallfry — Tue, 28 Aug 2007 20:41:46 GMT

@fused111 wrote:

@Tuscani wrote:
As far as age is concerned... only open TLs count.. Util, payment history, ect. still count on closed TL, however.

I have to disagree with you on this one! I have an old, closed AU TL reporting on EQ and TU and they have done two things: significantly raised my credit length history and average-age of my accounts. EX does not report this TL so my credit length history and average-age of accounts is much shorter and my score seems to reflect this.
http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=4402

Message Edited by fused111 on 08-28-2007 08:53 AM

Right you are fused.

Re: Calculating Average Account Age

Anonymous — Tue, 28 Aug 2007 21:19:05 GMT

Duplicate / deleted. I keep hitting reply instead of edit. Sorry.

Message Edited by ilovepizza on 08-28-2007 02:19 PM

Re: Calculating Average Account Age

Anonymous — Tue, 28 Aug 2007 21:18:15 GMT

@Anonymous wrote:
Question. If I have 1 credit card from 9 years ago that was open for 2 months, does that add 2 months in to average age or 9 years?

Do you know about how average is added up? Time open, or date opened? Wondering how closed accounts are calculated since they would have been open less time from start till now. Thanks

Re: Calculating Average Account Age

smallfry — Wed, 29 Aug 2007 00:40:25 GMT

@Anonymous wrote:

@Anonymous wrote:
Question. If I have 1 credit card from 9 years ago that was open for 2 months, does that add 2 months in to average age or 9 years?

Do you know about how average is added up? Time open, or date opened? Wondering how closed accounts are calculated since they would have been open less time from start till now. Thanks

The account stays on your reports ten years from date of closure. So if you open an account tomorrow and it reports a month or two it still counts towards the aging of accounts. In five years that account will show five years plus two months of age. closing an account does not kill the history but it freezes the potential age at the age at closure plus ten years. It is possible a CRA will remove it early but ideally closing an account does not hurt your history and as long as you don't need it for utilization and it is a low credit limit it might be wise to dump subprime cards as you move along. I don't think they look good on your reports and new creditors might be disposed to give you low credit limits if you show too many of these toy cards. My opinion.

Re: Calculating Average Account Age

Anonymous — Wed, 29 Aug 2007 01:59:38 GMT

Then it would be the start date that determines the average age and even a closed accounts grows in age until it is removed from your CR, if I read this correctly.

I just added up all my closed accounts and compared them to all my open accounts and my average was the same give or take a few months. However when I add up old accounts from from when they were open to closed my average drops 1 year. :-) Glad to hear they keep aging. :-)

Message Edited by ilovepizza on 08-28-2007 06:59 PM

Re: Calculating Average Account Age

Anonymous — Wed, 29 Aug 2007 02:17:32 GMT

Wow. One would really need to have "very old" credit file to maintain a thick file with lots of accounts and not drop below 10 years. Their CR file would need to be around 30 years old.

Re: Calculating Average Account Age

smallfry — Wed, 29 Aug 2007 02:26:19 GMT

@Anonymous wrote:
Wow. One would really need to have "very old" credit file to maintain a thick file with lots of accounts and not drop below 10 years. Their CR file would need to be around 30 years old.

Experian has me on file since 1976. That's the year I got my first credit card. Now if I hadn't gone brain dead and got all jammed up and went BK in 2000 my file would be over 30 years old today. You can easily get into the 800's with less than 20 years history if you never pay late. Pay online and make sure you always pay on time.

I'm A little confused

Anonymous — Sun, 23 Mar 2008 16:35:46 GMT

Hey guys, I have a question, If I had opened a new CC account My Average age is about three yrs & change, my oldest account opened 7 yrs ago,my Ex:698. Now, should I expect a score increase because of the 7k TL? "My credit to debt ratio" has increased, or will it Decrease because My age is going to be shorten?

Re: I'm A little confused

Anonymous — Mon, 24 Mar 2008 01:10:15 GMT

pepper06 wrote:
Hey guys, I have a question, If I had opened a new CC account My Average age is about three yrs & change, my oldest account opened 7 yrs ago,my Ex:698. Now, should I expect a score increase because of the 7k TL? "My credit to debt ratio" has increased, or will it Decrease because My age is going to be shorten?

Unfortunately, there's not enough information to answer your question. The short answer is that the new account will hurt your average age, but will help your utilization. The effect on your score will depend on which effect is greater.

To know how much it will hurt your average age we would need to know how many accounts you have as well as the age of each individual account. Just knowing your current average age doesn't help.

To know how much it will help your utilization, we'd have to know your current balances and CLs. Just knowing the fact that the new CL is $7K doesn't help here, either.

Message Edited by cheddar on 03-23-2008 09:10 PM

Re: Calculating Average Account Age

Anonymous — Fri, 20 Feb 2009 18:21:53 GMT

To clarify, any item that shows on my credit report counts towards AAoA, correct?

Even closed accounts? What is an account was open 5 years ago for 6 months. When I am working out my AAoA, would I add the months in, but then NOT the original year? I'm confused!

Re: Calculating Average Account Age

smallfry — Fri, 20 Feb 2009 18:26:40 GMT

@Anonymous wrote:
To clarify, any item that shows on my credit report counts towards AAoA, correct?

Even closed accounts? What is an account was open 5 years ago for 6 months. When I am working out my AAoA, would I add the months in, but then NOT the original year? I'm confused!

As Tuscani stated at the beginning of this thread ALL tradelines count. I assume that to mean public records and collections as well. All means all.

Re: Calculating Average Account Age

llecs — Fri, 20 Feb 2009 18:37:11 GMT

smallfry wrote:

@Anonymous wrote:
To clarify, any item that shows on my credit report counts towards AAoA, correct?

Even closed accounts? What is an account was open 5 years ago for 6 months. When I am working out my AAoA, would I add the months in, but then NOT the original year? I'm confused!
As Tuscani stated at the beginning of this thread ALL tradelines count. I assume that to mean public records and collections as well. All means all.

All except for CAs and PRs.