topic Re: Impact of Lowering AAoA Slightly? in General Credit Topics

Impact of Lowering AAoA Slightly?

EW800 — Sun, 12 Jul 2015 03:26:00 GMT

My AAoA at the moment is roughly 12 years. I am calculating that if I were to open one new account, it would lower my AAoA to about 11,5 to 11.6 years. I am just wondering if anyone has studied AAoA's enough to know if this degree of reduction would be a enough to have much of a negative impact on scoring, or would 11+ years likely still be considered as positive as 12 or so years? Any idea what FICO scoring considers an optimum AAoA?

Thanks to all!

Re: Impact of Lowering AAoA Slightly?

Revelate — Sun, 12 Jul 2015 03:50:47 GMT

@EW800 wrote:
My AAoA at the moment is roughly 12 years. I am calculating that if I were to open one new account, it would lower my AAoA to about 11,5 to 11.6 years. I am just wondering if anyone has studied AAoA's enough to know if this degree of reduction would be a enough to have much of a negative impact on scoring, or would 11+ years likely still be considered as positive as 12 or so years? Any idea what FICO scoring considers an optimum AAoA?

Thanks to all!

AAOA is a another diminishing return part of the algorithm. Yes, higher is always better, but realistically 11 to 12 years is likely a wash... based on data people have reported I generally suspect anything beyond 5 years irrelevant for anything reasonable... read as, being able to land in the highest tier on any product from any lender currently known to man.

I'm not one that would argue there's value in an 850 credit score other than personal pride though, YMMV.

FWIW I barely even moved going from 2->1 year and then back again, my file is dirty though but AAOA isn't really a big part of the algorithm to begin with.

Re: Impact of Lowering AAoA Slightly?

EW800 — Sun, 12 Jul 2015 04:02:42 GMT

Thank you much, Revelate. That is what I was hoping for, as far as that range pretty much being a wash.

Thanks again!

Re: Impact of Lowering AAoA Slightly?

Anonymous — Sun, 12 Jul 2015 12:02:57 GMT

My AAOA was 1 year 2 months.
I recently applied and was accepted by chase which droppedy AAOA.
I lost 4 to 6 points.

Whether it was because my AAOA was crappy to begin with or other reasons us a mystery to me. I know this was due to AAOA and not hard pulls because the hard pulls impacted me prior.

But with 12 years AAOA you shouldn't be dinged bad.

Re: Impact of Lowering AAoA Slightly?

takeshi74 — Sun, 12 Jul 2015 15:25:39 GMT

@EW800 wrote:
Any idea what FICO scoring considers an optimum AAoA?

As stated above the difference between 11.5 and 12 is probably neglible. However, keep in mind that there isn't just one FICO scoring model and that one's credit profile matters as well when it comes to impact. We don't know for certain whether or not there is any significance in going from 12 to 11.5 years but AAoA is typically only 15%:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

All we can really say that higher is generally better but as with any curve, there's a point where the returns diminish.

My scores are right around 800 and my AAoA is only just over 6 years. Could they be higher with a longer AAoA? Probably. Just pointing out that AAoA is just one factor to consider.

Re: Impact of Lowering AAoA Slightly?

Thomas_Thumb — Sun, 12 Jul 2015 20:24:39 GMT

@EW800 wrote:
My AAoA at the moment is roughly 12 years. I am calculating that if I were to open one new account, it would lower my AAoA to about 11,5 to 11.6 years. I am just wondering if anyone has studied AAoA's enough to know if this degree of reduction would be a enough to have much of a negative impact on scoring, or would 11+ years likely still be considered as positive as 12 or so years? Any idea what FICO scoring considers an optimum AAoA?

Thanks to all!

On various reports I have received over the last couple years it generally states that: "Most FICO high achievers have an average age of accounts of 11 years or more". IMO an AAoA of 10 years or more is certainly adequate for achieving a potential Fico 8 score of 850.

Your credit score is unlikely to be impacted by such a slight drop in AAoA. However, the hard inquiry associated with opening a new account may drop your Fico 8 score and would most likely drop your Fico 4 score. The inquiry is a factor in scoring for one year. (I had a hard inquiry 6/2014 associated with a CLI request - it did drop my Fico 4 but did not drop my Fico 8 - My AAoA is currently 16 years). It appears that Fico 8 may have a higher threshold on # of hard inquiries before impacting score.

Re: Impact of Lowering AAoA Slightly?

Revelate — Sun, 12 Jul 2015 21:25:36 GMT

@Thomas_Thumb wrote:
@EW800 wrote:
My AAoA at the moment is roughly 12 years. I am calculating that if I were to open one new account, it would lower my AAoA to about 11,5 to 11.6 years. I am just wondering if anyone has studied AAoA's enough to know if this degree of reduction would be a enough to have much of a negative impact on scoring, or would 11+ years likely still be considered as positive as 12 or so years? Any idea what FICO scoring considers an optimum AAoA?

Thanks to all!

On various reports I have received over the last couple years it generally states that: "Most FICO high achievers have an average age of accounts of 11 years or more". IMO an AAoA of 10 years or more is certainly adequate for achieving a potential Fico 8 score of 850.

Your credit score is unlikely to be impacted by such a slight drop in AAoA. However, the hard inquiry associated with opening a new account may drop your Fico 8 score and would most likely drop your Fico 4 score. The inquiry is a factor in scoring for one year. (I had a hard inquiry 6/2014 associated with a CLI request - it did drop my Fico 4 but did not drop my Fico 8 - My AAoA is currently 16 years). It appears that Fico 8 may have a higher threshold on # of hard inquiries before impacting score.

It was a step function under FICO 4 from data, likely is under FICO 8. Thresholds for individual breakpoints may have changed though, testable in the future just never really bothered as I personally view inquiries to be mostly irrelevant (within reason).

Does look on Beacon 5.0 with 3 scoreable inquiries on my report, I gained 7 points when I went down to 2, and lost them again when I went back up to 3 as a recent data example.

Also and I hate to say that there's anything wrong with a perfect FICO 8 score; however, your file may not track with anyone not at 850 - we've seen there can be blemishes and still be 850 in the past from some of android01 and other's reports and as such not everything has to be absolutely spotless to hit 850 which makes it sort of hard to test on for things like inquiries and what not until you're below that point and whatever buffer you have is gone.