@Anonymous wrote:
@Anonymous wrote:
Good info, I wasn't aware of the AoYA. I thought FICO only factored AAoA but didn't know they also looked at the youngest account age. Also didn't know store cards weren't counted as a separate mix of credit. So there's only 3 possible credit mix types, revolviing, installment and mortgage? Or is mortgage also considered installment?
Good info from CGID above. He is correct that there are 3 factors that go into age of accounts. AAoA is the most commonly discussed, and AoYA we discussed above which always drops to 0 any time a new account is opened. Once that account hits the 1 year mark, you no longer have a "new" account when AoYA crosses 1 year which is a threshold. There may be another threshold at the 2 year mark (arguable) but no one believes as far as I know that any exist beyond the potential 2 year mark.
AoOA is one of those factors that cannot change with the addition of new accounts like AoYA and AAoA. AoOA is only impacted by time and simply grows one month at a time. The only time AoOA can suddenly change is if your oldest account is closed. 10 years after it is closed, it falls off your report. When that happens, your AoOA immediately drops to the age of your next oldest account (open or closed) that's on your credit report. If you're a typical person that opens up an account every couple of years, your AoOA would never drop more than a couple of years, which if it's something-teen years old usually won't represent a significant change. In rare situtations though, where someone opens an account and then doesn't open another for a decade... feasibly one could have their AoOA drop from say 17 years to 7 years one day (for example) which is a pretty noteworthy change. Hopefully this all makes sense!
Hey BBS! That sounds plausible, but there can be frequent exceptions. Here's just one example. Bob opens a credit card. He then opens an account every other year for 16 years. These accounts are 36-month car loans, an occasional CC with a signup bonus (which he then closes to avoid the annual fee), a personal loan, finance company accounts, and finally a mortgage at year 16. Then he opens a few more credit cards at year 16 and closes his first one. At year 26 his old CC account falls off and his AoOA falls from 26 to 10.
I have seen that happen a few times to people here. The key is that all these subsequent accounts (in the example above) had fallen off before the very old account fell off, so they provided no protection.
Admittedly, going from an AoOA of 26 to 10 isn't the end of the world. But it is a drop of more than a couple years.
Great response by you as always, just thought I'd make that slight caveat. My personal view is that the best way to protect yourself from a precipitous loss in AoOA is to make sure you keep your two oldest credit cards open, even if they aren't especially sensational or flashy. The older they are, the more you should tend to protect them from being closed due to inactivity. My two oldest open cards are 13 years old, and my oldest open account is my student loan at 16 years. I do everything I can to keep them from being closed (very simple stuff, easy to do).
