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Adding Additional Account vs Average Age

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
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Member

Adding Additional Account vs Average Age

I have the problem of average age not being old enough with some of the bureaus, but I also have the problem of needing more accounts paid without any late fees or problems (trying to repair from a disaster that happened a few years back in order to hopefully buy a house in about a year).  

 

I currrently have 3 credit cards (one I have had since 2011, one since 2015 - it has one time late in 2015, and the last one I just got a month ago).  I also have a Self-Lender installment loan - it is 1 month old also.  As far as credit accounts, that's all I have that are active, and most of the closed accounts have problems (either derogatory or a late fee).  Would it do me more good to add the additional account (in this case, I was thinking to use Fingerhut since I have already been approved for it but have never actually used it - always thought too expensive...I won't get the additional inquery since it's already on there).  The reason I changed my mind on possibly using Fingerhut is because I found one thing that's not quite as overpriced, and I can get $25 off, which will go towards their insane shipping cost.  Anyway, it's the FreshStart option...so, it appears that it would be considered as an installment loan.

 

In MyFico, it says my Length of Credit History is "Very Good", but in other calculation platforms, it gives the age a D rating, saying the average is only 3 years, 1 month.

 

Thanks much in advance for the advice.  I appreciate it.  

Message 1 of 16
15 REPLIES 15
Community Leader
Super Contributor

Re: Adding Additional Account vs Average Age

Adding a new account cannot affect your length of credit history.  That would be Age of Oldest Account (AoOA).

 

Adding a new account will affect AAoA (Average Age of Accounts) -- by lowering it.  That in itself is harmful, not helpful, though the harm can be very minor in the bigger scheme of things.

 

Adding a new account will affect AoYA (Age of Youngest Account).  Prior to your mortgage pre-approval you'd ideally like your AoYA to be > 12 months and your inquiries to all be > 12 months.  The new account will reset your AoYA to 0 and give you a new inquiry.

 

If you are certain that you will NOT go through pre-approval in the next 13 months, then I don't see a problem with adding a revolving account now, though I am skeptical of the need to do it, since you have four open accounts in good standing. 

 

If, however, you think there is any chance you might go through preapproval earlier than 13 months from now, don't do it.

 

Certainly you should be huddling with the people in the rebuilding forum and working with them on getting your derogs completely removed from your reports. 

 

Do you have a plan for getting all your CC debt paid off (including closed accounts with balances)?  The place you should be trying to get to is exactly one card reporting a small positive balance (e.g. $15).

Message 2 of 16
Senior Contributor

Re: Adding Additional Account vs Average Age


@Mystik1 wrote:

I have the problem of average age not being old enough with some of the bureaus, but I also have the problem of needing more accounts paid without any late fees or problems (trying to repair from a disaster that happened a few years back in order to hopefully buy a house in about a year).  

 

I currrently have 3 credit cards (one I have had since 2011, one since 2015 - it has one time late in 2015, and the last one I just got a month ago).  I also have a Self-Lender installment loan - it is 1 month old also.  As far as credit accounts, that's all I have that are active, and most of the closed accounts have problems (either derogatory or a late fee).  Would it do me more good to add the additional account (in this case, I was thinking to use Fingerhut since I have already been approved for it but have never actually used it - always thought too expensive...I won't get the additional inquery since it's already on there).  The reason I changed my mind on possibly using Fingerhut is because I found one thing that's not quite as overpriced, and I can get $25 off, which will go towards their insane shipping cost.  Anyway, it's the FreshStart option...so, it appears that it would be considered as an installment loan.

 

In MyFico, it says my Length of Credit History is "Very Good", but in other calculation platforms, it gives the age a D rating, saying the average is only 3 years, 1 month.

 

Thanks much in advance for the advice.  I appreciate it.  


Hi and welcome to MyFICO

Some things to start doing:

  • Put your payments on autopay so you don't miss any more payments. This is diastrous to your scores. And mortgage lenders don't want to see any derogatories or new accounts in the previous 12 months before applying for a mortgage.
  • Since you have 3 CCs, you already have the right amount for scoring purposes. IMHO, please don't apply for anything else.
  • Start either a campaign of goodwill letters or find a way to cleanup the derogtories on your CRs.
  • There is no reason to use your Fingerhut card. It can remain a $0 balance because you have other balances on other cards and the installment loan.

GL2U

GOALS: Garden til DEC 2020 and 800 Club

Scores
APR 2019: EX 787, TU 789, EQ 781
JAN 2019: EX 794, TU 783, EQ 801
DEC 2018: EX 777, TU 783, EQ 799

|| AmX Cash Magnate $25K || NFCU CashRewards $20K || Macy's $20K || Discover IT $15.7K || NFCU CLOC $15K || NFCU Platinum $12.5K || AmX ED $11.5K || CitiCostco $7K || CitiDC $6.3K ||
Message 3 of 16
Member

Re: Adding Additional Account vs Average Age

Thanks!  And appreciate the info.  

 

  • I am paying on the card immediately after making purchases!  Smiley Happy  At this time, I am using credit cards only as a tool to repair my credit.
  • Thank you.  I won't, then.  
  • Yea, that's the main problem I am going to have, I feel like.
  • Thanks again!  
Message 4 of 16
Member

Re: Adding Additional Account vs Average Age

That's what I was thinking about the AAoA.  

 

I think it best to cut off here then and skip the Fingerhut going by the other feedback and your comment that you don't believe it to be needed, just to be safe....since I am not sure exactly when I will need to start the whole process.

 

Yes, the degrogs is what I really need to help with.

 

I do have the cc debit paid off and closed accounts with balances.  I will follow your advice about the $15.  Thank you.  Smiley Happy

Message 5 of 16
New Contributor

Re: Adding Additional Account vs Average Age

Just FYI your biggest score boost from your SElf Lender will be when its below 8.9% so you will want that during your app for your mortgage.

Message 6 of 16
Member

Re: Adding Additional Account vs Average Age

I discovered that too late. Sadly, it will be after the loan ends.
Message 7 of 16
Super Contributor

Re: Adding Additional Account vs Average Age


@Mystik1 wrote:

I have the problem of average age not being old enough with some of the bureaus, but I also have the problem of needing more accounts paid without any late fees or problems (trying to repair from a disaster that happened a few years back in order to hopefully buy a house in about a year).  


Where are you getting the idea that you need more clean accounts?  This sounds like something you may be seeing from front-end fluff software from a CMS like Credit Karma.  These things can be extremely misleading.  For example, CK suggests that "percentage" of on-time payments matters when it doesnt.  It even color codes it all pretty to suggest that 99% of on-time payments is just as good as 100%.  Any negative information is going to harm a profile and scores.  FICO scoring does not consider percentage of on-time payments.  It considers the presence (or lack of) negative items and goes from there.  If you have negative items present, adding several more or many more clean accounts with a ton of on-time payments isn't going to dilute your negative items or make them "count" less.  The only 2 ways to escape the negative wrath of negative items is to get them removed or wait for the to age and eventually fall off of your CR.

Message 8 of 16
Member

Re: Adding Additional Account vs Average Age

Thank you very much.  I indeed thought exactly what you said...that having more clean credit lines made the late payments present less damaging.  It's mainly because of how the credit reports show the number of clean accounts with nothing bad against them, and like you said, all the sites that get a commission on the cards and try to make you think more is better at any cost.  Smiley Very Happy  I thought that since I had few accounts, where half of them have a late payment, was a big problem for me...and having a couple more with 100% clean record would be positive.  Your reply is very helpful to me.  Thanks again.

Message 9 of 16
Member

Re: Adding Additional Account vs Average Age

What about total amount of credit?  I have read online that your score will increase if you have a larger amount of total credit available.  I guess that's another reason someone might want an additional account (if true)...

Message 10 of 16