How do I calculate AAoA?

[clemente21]

I just got a call back from a CC company after GW'ing to have some 60 and 90 day lates removed.  They called back and of course said "we have to report the account properly etc etc." and offered to delete the entire TL.  This TL is from 11/2006 which is the newest TL on my report, next to a collection that I'm about have wiped off from Nov 2009.

Is it a good idea to have this deleted? I also have a closed Citi CC from 5/2004, 2 charged off SL from 12/2004 and a closed Sears card from 12/2005 and was just approved for a Cap1 card that should be reporting any day now.

Is there a quick guideline to how many points to lose for AAoA and a good way to calculate the AAoA?  I calculated by hand my AAoA and it's much different than the AAoA I get from Experian.com report.

[MarineVietVet]

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@clemente21 wrote:

I just got a call back from a CC company after GW'ing to have some 60 and 90 day lates removed.  They called back and of course said "we have to report the account properly etc etc." and offered to delete the entire TL.  This TL is from 11/2006 which is the newest TL on my report, next to a collection that I'm about have wiped off from Nov 2009.

Is it a good idea to have this deleted? I also have a closed Citi CC from 5/2004, 2 charged off SL from 12/2004 and a closed Sears card from 12/2005 and was just approved for a Cap1 card that should be reporting any day now.

Is there a quick guideline to how many points to lose for AAoA and a good way to calculate the AAoA?  I calculated by hand my AAoA and it's much different than the AAoA I get from Experian.com report.

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Your AAoA is the sum of the ages of every account (except CA collections) on your report, whether open or closed, calculated in months, divided by the number of accounts and then divided by 12. I use the division by 12 to make it easier to convert into years. This is measured from the time each account was opened until present.

You’ll need to figure the age of each account, open or closed, on each report. If all three reports are identical (very unlikely), you're in luck; otherwise, you'll need to run this for each report.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[clemente21]

Yea, the AAoA is different on all three, which is really kinda weird.

How heavily is AAoA calculated?  This may drop my AAoA from what I can caculate 5.6 to 5.1.  Is that a big, big deal?  I'm just wondering if it's worth it just to have this bad account wiped off to drop the number of delinquent accounts down.

[Walt_K]

I'm confused.  How is deleting the youngest tradeline on your report going to drop your AAoA.  Shouldn't it increase?

[clemente21]

It's the second youngest TL.  There will be a brand new Cap1 card placed on probably this week at some point (2nd month closing date was Feb 5), which will give it a big spread.  The CC to be deleted is from 11/2006, which I will lose 4 year and 3 months of account history.

[Walt_K]

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@clemente21 wrote:

It's the second youngest TL.  There will be a brand new Cap1 card placed on probably this week at some point (2nd month closing date was Feb 5), which will give it a big spread.  The CC to be deleted is from 11/2006, which I will lose 4 year and 3 months of account history.

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Understood.  In the original post, you said newest TL, so I didn't see how this was going to affect your AAoA negatively.

[llecs]

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@clemente21 wrote:

Is there a quick guideline to how many points to lose for AAoA and a good way to calculate the AAoA?  I calculated by hand my AAoA and it's much different than the AAoA I get from Experian.com report.

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AAoA (as calculated by FICO) is found by adding the age of all OC TLs, opened or closed, good or bad, and dividing the number of TLs into that number.

So, for example....and not using your TLs as the basis just in case there are more, you have a BankXYZ CC that was opened 11/2008, a BankABC charge-off opened in 4/2004, a Mortgage opened in 7/1999, and a closed car loan opened in 8/2001. To calculate the age, figure out how many months are in between 2/2011 and each of these open dates for each OC TL...or 27 months for the CapOne, 82 months for Citi, 135 for the Mortgage, and 114 months for the car. The sum of these is 358 months. The AAoA would then be 358/4 or 89.5 months or 7 year and 5-6 month AAoA. FICO rounds down the AAoA, so this example would be an AAoA of 7 years. To figure if a dropped OC might hurt, it becomes fairly easy in that if the age of the TL in question is younger than your AAOA, then you could see an increase in AAoA and possibly your score. If the TL in question is older, then you could see a drop. If it might be a drop, then you'd want to recalculate AAoA to see if that could decrease with its removal.

Again, the above is only an example. Pardon any math errors on the age calculation since I did it in a hurry.

FICO reports will often show the AAoA. Your AAoA will vary between your 3 reports if the OC information is different in each. Other services like CreditKarma also show AAoA, but their calculation is different (their FAKO, a TransRisk or Vantage, only factors in open OC accounts, and not closed like FICO). I'm not familiar with Experian's report but the above example with CK may be an issue there too.

Damage/gains from AAoA change can vary. I recall seeing increases from 1 to 2 years but saw nothing from 2 to 3. YMMV based on your credit.

Also, AAoA isn't the only thing in play. FICO also looks at the overall length of history, the length of your longest revolving and the length of your longest installment. These shouldn't be touched.

Finally, I use a spreadsheet via Excel and updates monthly. Here are the two formulas I use:

To calculate the number of months between two dates:

=(YEAR(C5)-YEAR(B5))*12+MONTH(C5)-MONTH(B5)   (My C column was this month's date (2/1/2011) and my B column was the open date of the OC).

To calculate the average I just added up the total months and divided it into that number and rounded down.

 ETA...GOOD GOLLY, I'M A SLOW TYPER.

[llecs]

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@Walt_K wrote:

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@clemente21 wrote:

It's the second youngest TL.  There will be a brand new Cap1 card placed on probably this week at some point (2nd month closing date was Feb 5), which will give it a big spread.  The CC to be deleted is from 11/2006, which I will lose 4 year and 3 months of account history.

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Understood.  In the original post, you said newest TL, so I didn't see how this was going to affect your AAoA negatively.

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+1

[clemente21]

My apologies on not being very clear on that first post.  I should learn to proofread haha.

Anyways, the age of the CC-to-be-removed is 4.25 years and the AAoA of the report right now 5.3 years.  I calculated the AAoA of my report with CC removed and the new CC from 2/2011 added in and came up with an AAoA of 4.8. 

The problem that I see is that this takes me down under the 5 year mark.  Isn't the 5 year mark a pretty big milestone in FICO?

[clemente21]

BTW, I have only one 60 day late on this account (from 2/2008) and three 30 days, the newest one being from Oct 2008.  Is it even worth it to get rid of this 2 year+ 60 day?