AAoA and change of cards

[Anonymous]

I'm trying to figure my AAoA. I have a card with annual fee for two years and have recently changed it to a no annual fee card. The no annual fee card has a new number on the card. And now that I have a different number, does this mean I'm starting a new account and I can't count the past 2 years when I compute my AAoA?

[Anonymous]

No, for 2 reasons.  One, when you PC a card the new card still carries the same account opened date as the old one.  The only time this wouldn't be the case is if you actually closed the first card and opened another, but that's not considered a product change.  Two, whether an account is open or closed has no bearing on AAoA.  If the account appears on your CR (open or closed) it is factored into your AAoA by the FICO algorithm.  That being said, even if you did close your card today, it would continue to be factored into your AAoA for as long as it remains on your CR, which is typically 10 years from the date you close it.

[Anonymous]

hey thanks, didn't know that closed accounts are factored into AAoA

[Anonymous]

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@Anonymous wrote:

hey thanks, didn't know that closed accounts are factored into AAoA

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Yes, Fico factors closed accounts into AAoA, but not services like Credit Karma (CK), which use a cheap credit scoring model called Vantage Score 3.0. The latter only factors open accounts only, which is not accurate.

Note: Disregard this message. Read message 5.

[Anonymous]

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@Anonymous

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Yes, Fico factors closed accounts into AAoA, but not services like Credit Karma (CK), which use a cheap credit scoring model called Vantage Score 3.0. The latter only factors open accounts only, which is not accurate.

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Actually VS 3.0 does factor in closed accounts into AAoA.  It's the front-end monitoring software that CK uses that would lead you to believe otherwise, as the calculations they give there only show you your AAoA based on your open accounts.  The actual VS 3.0 model though does indeed count both open and closed accounts into AAoA, just like FICO models.

[Anonymous]

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@Anonymous wrote:

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@Anonymous

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Yes, Fico factors closed accounts into AAoA, but not services like Credit Karma (CK), which use a cheap credit scoring model called Vantage Score 3.0. The latter only factors open accounts only, which is not accurate.

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Actually VS 3.0 does factor in closed accounts into AAoA.  It's the front-end monitoring software that CK uses that would lead you to believe otherwise, as the calculations they give there only show you your AAoA based on your open accounts.  The actual VS 3.0 model though does indeed count both open and closed accounts into AAoA, just like FICO models.

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Thanks for the correction, BBS! Many here have told me that was not the case when I posted about it a month ago. 

[Anonymous]

I used to believe that only open accounts were factored in to AAoA under VS 3.0 as well.  I'm quite sure I thought that because of CK.  IMO CK has to be one of the most manipulative tools out there and their front end software is responsible for misleading tons of people.  It's pretty crazy when I think about it.

[Anonymous]

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@Anonymous wrote:

I used to believe that only open accounts were factored in to AAoA under VS 3.0 as well.  I'm quite sure I thought that because of CK.  IMO CK has to be one of the most manipulative tools out there and their front end software is responsible for misleading tons of people.  It's pretty crazy when I think about it.

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Well said! I just saw a commercial for Credit Karma, and I couldn't help but cringe. LOL.

[Anonymous]

Don't get me wrong, CK definitely has it's place.  Weekly updates to your TU/EQ reports along with alerts is definitely a good thing.  Outside of that, there is far more that should be ignored:

1 - Their VS 3.0 scores

2 - Their AAoA calculation

3 - Their percentage of on-time payments graphic

4 - Their product offers (approval odds) for CCs/loans

5 - Their utilization figure, which suggests that anything from 0%-29% overall utilization is idea.  We know 0% isn't ideal, nor is > 8.9%

6 - Their "total accounts" graphics that manipulate members into thinking that having 11+ accounts is ideal

7 - Possibly their "derogatory marks" graphic; like their percentage of on-time payments it may only look at the last 2 years

8 - Their inquiry graphic, which suggests that 1-2 hard inquiries (green) is just as good as 0

I'm sure there are other examples, but these above are the ones that come to mind shooting from the hip.

[Anonymous]

5 - Their utilization figure, which suggests that anything from 0%-29% overall utilization is idea.  We know 0% isn't ideal, nor is > 8.9%

alright, this is news to me. I have always believed that the overall utilization under 30% is fine. We are talking about the overall utilization for one card and or all of the cards we own right? 8.9% utilization is not a lot of money we can use if we have a low credit limit