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AAoA

800goal800
Frequent Contributor

AAoA

Does AAoA only take into account open accounts ?  The oldest account on my report is 25 years but that has been closed for 8.  

Message 1 of 11
10 REPLIES 10
ImTheDevil
Community Leader
Super Contributor

Re: AAoA

In FICO scores, closed accounts are figured in. VS3.0 ignores closed accounts.


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Message 2 of 11
BrutalBodyShots
Super Contributor

Re: AAoA


@ImTheDevil wrote:
In FICO scores, closed accounts are figured in. VS3.0 ignores closed accounts.

You're right that closed accounts are figured into AAoA for Fico scoring, but incorrect that VS 3.0 ignores closed accounts in that figure.  Both algorithms consider both open and closed accounts.  Where I think you're being mislead is by something such as Credit Karma's front-end fluff summary software that only gives an AAoA based on open accounts... but that's CK and not how the VS 3.0 algorithm works.

 

OP, your 25 year old account is being factored into your AAoA for scoring purposes.  Since it's been closed for 8 years, you can expect it to fall off of your CR in roughly 2 years.  At that time you'll lose the positive AAoA impact from that account and your AAoA will drop accordingly.

Message 3 of 11
SouthJamaica
Super Contributor

Re: AAoA


@800goal800 wrote:

Does AAoA only take into account open accounts ?  The oldest account on my report is 25 years but that has been closed for 8.  


FICO scoring takes into account both open and closed accounts which appear in your report.

 

Closed accounts stay in your report after they are closed, often for 10 years or so. Sooner or later they will fall off.

 

Your oldest account will eventually drop out.  That occurrence will affect not only your average age of accounts, but also your age of oldest account, which is a separate -- and often an even more important -- factor.


Total revolving limits 678000 (585000 reporting) FICO 8: EQ 745 TU 750 EX 719

Message 4 of 11
aeroazure
New Contributor

Re: AAoA


@BrutalBodyShots wrote:

@ImTheDevil wrote:
In FICO scores, closed accounts are figured in. VS3.0 ignores closed accounts.

You're right that closed accounts are figured into AAoA for Fico scoring, but incorrect that VS 3.0 ignores closed accounts in that figure.  Both algorithms consider both open and closed accounts.  Where I think you're being mislead is by something such as Credit Karma's front-end fluff summary software that only gives an AAoA based on open accounts... but that's CK and not how the VS 3.0 algorithm works.


Interesting, I thought Credit Karma was am accurate depiction of VS3.0. I'm just glad I have a free monthy FICO 8 score for each bureau so I don't even have to touch Credit Karma. 


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Message 5 of 11
BrutalBodyShots
Super Contributor

Re: AAoA


@aeroazure wrote:


Interesting, I thought Credit Karma was am accurate depiction of VS3.0. I'm just glad I have a free monthy FICO 8 score for each bureau so I don't even have to touch Credit Karma. 


Nope, there are a bunch of things in CK's front-end fluff software that are misleading and not how VS 3.0 works.  Some of these include but are not limited to:

  • The suggestion that "percentage" of on-time payments matters.  Also suggesting that 99% and 100% are both equal when it comes to payment history, when 99% by default means a payment was missed and that's never as good as never having missed one.
  • Their utilization graphic suggests that 0-9% and 10-29% are equal (both green) when we know that 0% utilization results in a score ding, as does landing in the 10%-29% range (relative to under 9%).
  • Their graphic that 1 derog is "yellow" and 2+ is "red" suggesting that 1 isn't that bad when the fact is that 1 major derog verses 2 verses 10+ is all going to majorly impact score in a negative way due to diminishing returns from additional derogs.
  • Their suggestion that only open accounts (not closed as well) are factored into AAoA.
  • Their "green" graphic that suggests that 21+ accounts (anything greater than that) is ideal.
  • Their "green" graphic that shows 1-2 inquiries is just as good as 0 inquiries being present, when we all know that's BS.
Message 6 of 11
aeroazure
New Contributor

Re: AAoA


@BrutalBodyShots wrote:

@aeroazure wrote:


Interesting, I thought Credit Karma was am accurate depiction of VS3.0. I'm just glad I have a free monthy FICO 8 score for each bureau so I don't even have to touch Credit Karma. 


Nope, there are a bunch of things in CK's front-end fluff software that are misleading and not how VS 3.0 works.  Some of these include but are not limited to:

  • The suggestion that "percentage" of on-time payments matters.  Also suggesting that 99% and 100% are both equal when it comes to payment history, when 99% by default means a payment was missed and that's never as good as never having missed one.
  • Their utilization graphic suggests that 0-9% and 10-29% are equal (both green) when we know that 0% utilization results in a score ding, as does landing in the 10%-29% range (relative to under 9%).
  • Their graphic that 1 derog is "yellow" and 2+ is "red" suggesting that 1 isn't that bad when the fact is that 1 major derog verses 2 verses 10+ is all going to majorly impact score in a negative way due to diminishing returns from additional derogs.
  • Their suggestion that only open accounts (not closed as well) are factored into AAoA.
  • Their "green" graphic that suggests that 21+ accounts (anything greater than that) is ideal.
  • Their "green" graphic that shows 1-2 inquiries is just as good as 0 inquiries being present, when we all know that's BS.

Wow. Thanks for the information. I had been using Credit Karma for over a year and did not realize it was not as accurate as I thought. Do you know any accurate sources for VS3.0? I can check my VS3.0 through Chase and am thinking that might be the most accurate free source. It doesn't really matter to me since I only really pay attention to my FICO 8 score, but it would still be nice to know.


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Message 7 of 11
BrutalBodyShots
Super Contributor

Re: AAoA

It depends on what you mean by "accurate."  All front-end fluff software from what I've seen regardless of source is very misleading.  You mentioned Chase.  Off hand I know their summary software only looks at open accounts for displaying AoOA.  They also say that 1 late payment is "good" suggestive that having just 1 isn't all that bad when in fact it's the worst thing someone can do if they've got a clean file.  That's just 2 examples that I can think of off hand.  If you're talking an accurate score from VS, regardless of the source the score will be the same if pulled at the same time using the same bureau data.  While a highly irrelevent score under 99% of circumstances, it is indeed accurate.

 

CK is great for weekly reports, but that's where it ends.  Their reports are solid and a great tool and very rarely does anyone report anything inaccurate with them.  Definitely don't confuse the reports you get with the BS summary fluff that you get from CK or any other source.

Message 8 of 11
aeroazure
New Contributor

Re: AAoA


@BrutalBodyShots wrote:

It depends on what you mean by "accurate."  All front-end fluff software from what I've seen regardless of source is very misleading.  You mentioned Chase.  Off hand I know their summary software only looks at open accounts for displaying AoOA.  They also say that 1 late payment is "good" suggestive that having just 1 isn't all that bad when in fact it's the worst thing someone can do if they've got a clean file.  That's just 2 examples that I can think of off hand.  If you're talking an accurate score from VS, regardless of the source the score will be the same if pulled at the same time using the same bureau data.  While a highly irrelevent score under 99% of circumstances, it is indeed accurate.

 

CK is great for weekly reports, but that's where it ends.  Their reports are solid and a great tool and very rarely does anyone report anything inaccuratewith them.  Definitely don't confuse the reports you get with the BS summary fluff that you get from CK or any other source.

Alright, it's all starting to make more sense. Thanks for the great explanation!


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Message 9 of 11
jamie123
Valued Contributor

Re: AAoA


@BrutalBodyShots wrote:

@ImTheDevil wrote:
In FICO scores, closed accounts are figured in. VS3.0 ignores closed accounts.

You're right that closed accounts are figured into AAoA for Fico scoring, but incorrect that VS 3.0 ignores closed accounts in that figure.  Both algorithms consider both open and closed accounts.  Where I think you're being mislead is by something such as Credit Karma's front-end fluff summary software that only gives an AAoA based on open accounts... but that's CK and not how the VS 3.0 algorithm works.

 

OP, your 25 year old account is being factored into your AAoA for scoring purposes.  Since it's been closed for 8 years, you can expect it to fall off of your CR in roughly 2 years.  At that time you'll lose the positive AAoA impact from that account and your AAoA will drop accordingly.


Your 25 year old account might not drop off after 10 years. Sometimes they do and sometimes you can get lucky. My wife still has a J C Penney CC that was opened in 1987 and closed in 1990 on her reports. Her scores benefit greatly from this because her next oldest account is only about 10 years old.


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Current Score: EQ 817 3/10/20 - EX 820 3/13/20 - TU 825 3/03/20
Message 10 of 11
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