@digitek wrote:I always hear about AAoA, but I only rarely hear about how oldest account factors in. Does anyone have any hard reading on oldest account factor? My oldest account is actually the one I use the least, and I've wanted to close it (because I'm one of those "If I'm not using it, I might as well close it" types), but heard that oldest account is important.
Age of oldest account is a completely separate factor from Average age of accounts.
@Aahz wrote:
@digitek wrote:I always hear about AAoA, but I only rarely hear about how oldest account factors in. Does anyone have any hard reading on oldest account factor? My oldest account is actually the one I use the least, and I've wanted to close it (because I'm one of those "If I'm not using it, I might as well close it" types), but heard that oldest account is important.
Oldest Account actually weighs more heavily then AAoA in the Length of History component of your score. But that is still only 15% of total score weighting.
You don't hear about it much because there's not really anything most people can do about it at this point. Whereas we can help or hurt AAoA with current actions, we can't go back in time and open an account earlier then we did.
Of course, that all gets turned on its head when someone is debating closing their oldest card. At that point the question becomes 'how much older is it than your second oldest?' If the gap is less then 2 years I say it's a non-issue. If it's larger than two years I'd be sure to keep the oldest open "forever" unless it had an annual fee attached. If the gap is 5 plus years I'd struggle with closing depending on just how high that fee is.
Very very good point
@Anonymous wrote:When I started my credit journey a couple years ago, one of the first cards I was approved for was the Total Rewards Visa. I used it to build up to other cards and then threw it in the sock drawer to be forgotten. I received a letter that because I have gone 12 months without activity, I have 90 days to use the card or they will cancel. Because I have other cards with better rewards, I highly doubt that I will use this card unless we decide to take a trip. The way I understand it is if I close it, it stays on my report for 10 years but will it stop counting towards my AAOA? I don't need any hits to that because I am under 2 years.
Should I run a small charge through it and toss it back in the drawer til next year? How do others handle the accounts you rarely use?
Me I either close them or use them once a month.
@SouthJamaica wrote:
@Revelate wrote:A couple years ago I would've been loath to admit this, but now everything I can is on autopay at this point and I am using Credit Karma's every week or two pulls to see if I have any balances on cards I need to handle. Was spending too much time on credit card management, just wasn't ultimately worth it.
I would have a nervous breakdown if I tried that. Me, I have to know what's out there at all times.
Heh I was never in nervous breakdown territory but even with my gaps in employment my low expenditures make me pretty financially stable.
My habits have changed over time though: I was spending time logging into every single account regularly, then every single account twice a month, then every single account once a month... and then I noticed I wasn't really being disciplined about what date I checked on, and as my number of credit cards expanded it became more and more time consuming and awkward.
On the flipside I refresh my CK pulls fairly often, and it's trivial to click on accounts, sort by balance, and see: I managed to optimize the entire routine checks of my credit cards utterly out.
I'm sure there's better ways to do this, and ultimately one has to do what makes one comfortable, but I think most of us at some point realize there isn't as much need to be zealously checking every single credit card and if you get past the "must be optimized at all times!" behavior, what's on the credit report for effectively every credit card issuer is good enough to get a quick check of what's due. If I do screw up (and I'm nowhere close to perfect, I have my failings to be sure and sometimes this is one of them), that's what autopay is for, and it does indeed work.
I would be surprised in say another 3 years if you're using the same method you use now... happens, just I think the majority of members step back a little bit towards the mainstream consumer in terms of their management of credit card balances over time.
@Anonymous wrote:
So, I've always wondered... everyone always talks about AAoA with regards to putting small purchases to keep the cards open... but doesn't that also help payment history, the largest category? I don't understand how this category is calculated (unless its no missed payments =perfect score) but I know credit karma and the like always mention "Total Payments " like it's something important.
My plan was to sit down quarterly and purchase $2 amazon gift cards with everything I don't use monthly. Keeps everything active, barely touches utilization, loses pennies in rewards, and adds a couple dozen Total Payments a year.
As near as I can tell from all the anecdotal data available for both FICO and Vantage, payment history is simply whether you have deliquencies or not... and a $0 balance is still a pretty OK i.e. you win. This may change in the future but currently there's nothing in the algorithms which looks at anything beyond the base tradeline data when it comes to payment history or revolving utilization.
It gets a little wierd with a few lenders like Synchrony who historically unless you had a balance, they would neither cut a statement nor update the bureaus; however, when you finally did leave a balance, all the prior months would get updated correctly.
Flatly ignore that CK statistic anyway: it apparently only calculates off some subset of one's payment history (24 or perhaps 48 months? I haven't done the math on my own report) which is absolutely wrong. Incidentally I gained 84 points today on my TU Vantage 3, good times haha.
Thanks for the heads up, I knew I had read that Age of Oldest Account was somewhat different than just how it affects AAoA. My oldest card gets Netflix/Hulu every month and thats it. After I refinanced my mortgage, it is my oldest account by almost 5 years. Guess I'll just keep doing the Netflix/Hulu thing until USAA allows Product Changes to that 5% gas card......so forever. Glad I asked because I was going to close it.
