Age of Credit

[Anonymous]

So I have had accounts report to the CRB since 2008-2009, but when I pull my report its saying thr avg age is like 1yr 7 mon.

Is there anyway to get that fixed?

[RobertEG]

Avg age is the sum of the age of ALL accounts, open and closed, divided by the total number of accounts.

You also have the age of the OLDEST account, which is a separate scoring item.

Length of credit history is a combination of average age and oldest, with possible additional adjustment if you have very new accounts.

[sydney449]

Can Age of Credit be improved somehow?

[RobertEG]

Age of accounts calculations, both for the oldest account and for the average age of accounts, suffers from two major factors that often leads to problems beyond the control of the individual consumer.

First, any given creditor can decide at any time to delete their account, which removes it entirely from scoring.  That applies to both open and closed accounts, but is more common with closed accounts.

Second, the CRAs have an arbitrary policy of deleting old accounts once they reach approx ten years from date closed.

They assume that by that point they are no longer of use to other creditors in that any derogs have normally become excluded at 7-10 years, and thus wiping out those accounts will not affect their clients.  That ignores the effect on part of their client base, which are consumers, who do suffer loss of those accounts in thier age of accounts scoring.

The consumer can do little to improve age of accounts other than let time pass, but can be victim to loss of accounts in their scoring at any time.

It is far from a perfect system as long as credit reporting is voluntary and the CRAs delete accounts.

[Revelate]

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@RobertEG wrote:

Age of accounts calculations, both for the oldest account and for the average age of accounts, suffers from two major factors that often leads to problems beyond the control of the individual consumer.

First, any given creditor can decide at any time to delete their account, which removes it entirely from scoring.  That applies to both open and closed accounts, but is more common with closed accounts.

Second, the CRAs have an arbitrary policy of deleting old accounts once they reach approx ten years from date closed.

They assume that by that point they are no longer of use to other creditors in that any derogs have normally become excluded at 7-10 years, and thus wiping out those accounts will not affect their clients.  That ignores the effect on part of their client base, which are consumers, who do suffer loss of those accounts in thier age of accounts scoring.

The consumer can do little to improve age of accounts other than let time pass, but can be victim to loss of accounts in their scoring at any time.

It is far from a perfect system as long as credit reporting is voluntary and the CRAs delete accounts.

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Given one can get to 760 on a clean file after a year, and we've had at least one report of 800 after 2, age is sort of irrelevant: not missing a payment, or outstanding debt, ever, is the key driver to a credit score in the modern credit market... same as it ever was, but losing accounts isn't nearly as problematic as it once was in my estimation.

That said I fully intend to keep 2-3 tradelines forever if I can.

[Anonymous]

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@sydney449 wrote:

Can Age of Credit be improved somehow?

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Hi Sydney.  In the case of our original poster (OP), he could pull his reports and confirm that the particular tradeline he's thinking of is indeed on each of the three reports.  (Likely he just didn't understand the difference between average age of accounts and age of oldest account, which Robert explained to him.)  If there is a particular old account that he's thinking of, and it is not on a particular report, he could always reach out to the creditor and politely discuss it with them.  Especially if the account is still open, and he emphasizes how much he wants to still use it, the creditor might be willing to report it for him if somehow it has fallen through the cracks.

To take your question in general terms, the other common strategy for raising the age of your oldest account fast and and dramatically is to become an authorized user on a loved one's very old account (e.g. father's very old credit card).  I share the view of some people that this is really a strategy that only makes sense for a person who's just starting out or is rebulding.  You become an AU, gain the benefit of 20 years of credit history, get a score boost, and then use that boost to begin applying for a few cards of your own.  After a couple years you ask your wife/dad/etc. to drop you as an AU, since you can now stand on your own.

Should you choose to investigate the AU strategy, there are lot of places in this forum that discuss it.  It may be the case that some credit card companies will now treat an AU as if it was a new account for you, rather than what you want, which is an account that appears as though it were opened 20 some years ago (say).  So as with anything, research everything carefully first to make sure you are getting what you want.

[Anonymous]

I always was under the impression that average age of accounts had to do with CURRENT accounts, not all accounts.  If it had to do with ALL accounts, why do people post on here to never close your oldest CC or your AAoA will drop?  If it still counted in your AAoA, closing it wouldn't matter then right?  I know CK uses vantage models, but when my oldest CC of 15 years got closed on me my AAoA dropped from 6-7 years to 2.6 years and my score dropped a good chunk that month.

[takeshi74]

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@Anonymous wrote:

So I have had accounts report to the CRB since 2008-2009, but when I pull my report its saying thr avg age is like 1yr 7 mon.

Is there anyway to get that fixed?

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Average Age is exactly what it says -- an average of the ages of your accounts, i.e. the sum of the ages of your accounts divided by the number of accounts.  Even with accounts that reported back in 2008-2009 it's certainly possible to have an average of 1 year 7 months.  Have you calculated your Average Age of Accounts?  What did you come up with?

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@sydney449 wrote:

Can Age of Credit be improved somehow?

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 Only with the passage of time.  AmEx used to backdate but they ended that just over a year ago.  You can quickly reduce AAoA by opening a new account but there's no quick way to increase it.  The thing is that AAoA isn't just age but number of accounts as well.  The trick is to strike a balance between thickening your credit profile with more accounts versus reducing your AAoA by opening new accounts.  As one's profile thickens AAoA sees less of a hit from opening new accounts.

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@Anonymous wrote:

To take your question in general terms, the other common strategy for raising the age of your oldest account fast and and dramatically is to become an authorized user on a loved one's very old account (e.g. father's very old credit card).

 I overlooked this.  However, it should be pointed out that accounts where one is an AU may not be considered by a scoring model and/or creditor, sometimes depending on the specifics.  FICO, for example allegedly has algorithms to prevent piggybacking like this but I've never seen details on how they determine what to exclude and what to include.  A given creditor may choose to disregard accounts where one is an AU (which is indicated on reports) when considering one's credit profile.

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@Anonymous wrote:

I always was under the impression that average age of accounts had to do with CURRENT accounts, not all accounts. 

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CK only considers open accounts which is actually AAoOA, not AAoA.  There may be other models that only consider open accounts but that's one example that I know of.  FICO, on the other hand, considers open and closed accounts on a report when determining AAoA.  There are some creditors that use the VantageScores provided by CK but most creditors use one of the FICO models.

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@Anonymous wrote:

If it had to do with ALL accounts, why do people post on here to never close your oldest CC or your AAoA will drop?

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People tend to rely on oversimplifcations.  Typically closed accounts in good standing no longer appear on reports after 10 years.  At that point the closed account no longer factors into AAoA.  In theory, AAoA would be greater with the old account.  However, in reality one doesn't need to keep every old account for a high score.  During those 10 years other accounts also age.  All that said, some people may choose to keep their oldest accounts no matter what just as some may choose to go to other extremes to try and eke out every possible point (e.g. carefully controlling reported revolving utilization, number of revolving accounts reporting balances, trying to avoid HP's at all possible cost, etc).

This is only anecdotal but I've closed my oldest accounts a number a times in the past and have eventually lost them over time.  However, my latest TU FICO 8 provided by Discover is 825.

As stated above, keep in mind the typical relative weights of the standard factors.  Certainly keep the impact to AAoA and Length of Credit History in mind but don't blow it out of proportion.

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

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@Anonymous wrote:

I know CK uses vantage models, but when my oldest CC of 15 years got closed on me my AAoA dropped from 6-7 years to 2.6 years and my score dropped a good chunk that month.

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Again, CK and VantageScore only consider open accounts.  The drop in your VS 3.0's only matters to creditors that uses those scores.  If your creditors use a FICO model then your FICO's won't see such a drop from impact to age from account closure.  Even with CK and VS it's not just age that is impacted but revolving utilization as well (also impacted with FICO models).

[Anonymous]

Thanks for that information, it was very insightful.  I wasn't aware that FICO models included all accounts on the credit report, even closed ones while I was aware that the Vantage 3.0 model only counted open accounts. 

[iv]

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@takeshi74 wrote:

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Again, CK and VantageScore only consider open accounts.  The drop in your VS 3.0's only matters to creditors that uses those scores.  If your creditors use a FICO model then your FICO's won't see such a drop from impact to age from account closure.  Even with CK and VS it's not just age that is impacted but revolving utilization as well (also impacted with FICO models).

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Not true.

While CK only includes open accounts in their "value-add" charts and calculations, the actual VS3 they provide certainly does include both open and closed accounts.

See http://your.vantagescore.com/resource/81