Age of Credit

[sydney449]

Thank you.

[Anonymous]

Note to BrutalBodyShots, Sydney, etc. --

As Takeshi pointed out, both old and closed accounts count equally factor in your scores.  But more than that, in case this isn't clear, your closed accounts continue to age even after being closed.  Thus you can open a credit card, close it a year later, and then eight years after that it will be contributing to your age factors no differently than it would if it had remained open for the full nine years.  (Except that it will probably drop off your reports ten years after the close date.)

BBS asked "why do people post on here to never close your oldest CC or your AAoA will drop?"  (I.e. drop immediately)

Well, if they say that there's a seed of truth in it, though the way they are saying it is mistaken. 

First off, and most importantly, its not their AAoA that they are trying to protect (Average Age of Accounts) but a different scoring factor altogether: Age of Oldest Account (AOA).  AAoA and AOA are both important factors in the Age category.  If you have an old credit card that charges no annual fee, it's worth keeping that going so that it will keep your AOA growing. 

Second, your AOA will not drop immediately -- closing the card will, however, cause that card to drop off your report several years from now, which will THEN cause your AOA to change.

EXAMPLE: Bob has three credit cards.  Two he just opened, and the other he opened 20 years ago.  If he closes his oldest account, his AOA will continue to grow.  But 9-10 years from now (or even sooner) that closed card will drop off his reports.  Just before it drops off, his AOA will be 30.  And after it drops off, his AOA will be 10.  Not the end of the world, but he lost a nice AOA when he totally didn't have to.

[Anonymous]

Very useful info.  So the fact that my credit union closed my CC last year that I opened 15 years ago in fact will likely still positively add value to my AAoA for another 9 years give or take.  Interesting.

Here's an odd question.  That same credit card I just reference above was opened on 3/19/01.  Over the years I was issued a new card 4 times; on my report it shows "credit card lost or stolen" 4 times.  On my report though, all 5 entries (accounts) show a opened date of 3/19/01.  You would think they would show the opened date as the date the new card was issued.  Does this mean then that I actually have 5 accounts with a 15 year old age being factored into my AAoA?  Is that usually how "lost or stolen" accounts are represented on a credit report, or did a slightly "luck out" in that department?

[Anonymous]

Not only will that closed account continue to improve your AAoA as long as it remains on your account, if it happens to be the oldest account on your report it will also continue to improve your AOA.

Regarding the card that was lost 4-5 times:

All five entries should indeed have the same date opened, because they are all the same account and that was the date it was opened. 

I'd be surprised if FICO is counting that as five different accounts, each 15 years old.  It should be possible (I would think) for FICO to see that this is the same account due to fields in the CRA.  But of course I'd be interested to hear that I am mistaken.

I am pretty sure that the kind of thing you are describing is possible, however, because I think it happened to me.  My student loan was sold by one servicer to another.  When they did that, the new servicer indicated that my loan had a Date Opened of a month ago.  I objected, and a long debate with the CRAs and the two servicers ensued with multiple failed attempts at correction.  After five months of wrangling my reports finally ended up with three different accounts being listed all with different account numbers and different lenders, but with the same very old Date Opened (one loan still open and the other two loans with differing Date Closed).  My guess is that FICO views them as three different student loans.  Although it is not accurate that I have three loans, the final state of my reports benefitted me and I felt like I kinda earned it with all the work they put me through to fix their mistake.

Losing a card is very common though, so I imagine it must be easy for FICO to detect when the multiple entries all refer to the same card.  Again, somebody more experienced may know the answer for sure.

[Anonymous]

I see what you're saying.  I agree that FICO should be able to pick up on those things.

I had something similar to your loan situation happen with my original mortgage.  It was bought out twice by different lenders, once about 2 years after I got the house and another about 3 years after that and it's been with the 3rd company for 6 years now.  On my credit report it shows 3 different mortgages with 3 different count origination dates when I actually only applied for credit once.  I guess there are just some things that we have no control over.

I do find it interesting that it counts all of the reissued credit cards as additional accounts... that is, the "total number of accounts" is higher by the number of reissued cards which I believe could indirectly improve ones score a tad as well.

[iv]

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@Anonymous wrote:

Very useful info.  So the fact that my credit union closed my CC last year that I opened 15 years ago in fact will likely still positively add value to my AAoA for another 9 years give or take.  Interesting.

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 Yup.

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@Anonymous wrote:

Here's an odd question.  That same credit card I just reference above was opened on 3/19/01.  Over the years I was issued a new card 4 times; on my report it shows "credit card lost or stolen" 4 times.  On my report though, all 5 entries (accounts) show a opened date of 3/19/01.  You would think they would show the opened date as the date the new card was issued.  Does this mean then that I actually have 5 accounts with a 15 year old age being factored into my AAoA?  Is that usually how "lost or stolen" accounts are represented on a credit report, or did a slightly "luck out" in that department?

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In my experience (multiple compromised cards over the years), that's not all that normal - usually the previous tradeline is removed, and the new one is added (but with the open date and sometimes the payment history of the old one).

But it's all up to what/how the issuer reports... the CRAs and FICO are not doing any sort of de-dup there.

And yeah, assuming there are no negative indications on the duplicate tradelines, it does currently count as a positive factor on your report.

[Anonymous]

Sweet, thanks for that insight.  The card was through a local credit union, so perhaps since they're relatively small they aren't up to speed on doing everything quite the right way.  I'll certainly take a "bank error in my favor" though if it means a few extra points on my credit report due to a greater AAoA.

[Anonymous]

I like the Monopoly reference.

It's a really sweet error in your favor.  Four extra 15 year old tradelines?  That's really nice.

[KSK1912]

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@Anonymous wrote:

Sweet, thanks for that insight.  The card was through a local credit union, so perhaps since they're relatively small they aren't up to speed on doing everything quite the right way.  I'll certainly take a "bank error in my favor" though if it means a few extra points on my credit report due to a greater AAoA.

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That may be the reason. Normally with the credit cards, because your credit card number is your account number as well, everything, payment history, open date, all will stay the same in your report, and only the account number will change, which does NOT make it a NEW account. Just like if you have AT&T cell phone service for the past 10 with no interruption, and for whatever reason you need to change your phone number, or your area code because you moved, this does not delete your history with att and open a new account, they simply make the changes in the system and give you a new number. It is the same with the cc's as well. I just did it recently on my cap one cc, and all that happened is when they reported the payment and the balance last month, i got a notification from TU that the account number had changed. That's it. Everything else is exactly the same. 

[Anonymous]

Absolutely.  Fortunately they will fall off at the rate the new cards were issued, which is the date that the previous was closed so at least they will be periodically lost.  It would sting to lose five 25 year old accounts 10 years from now.