AAOA question

[Anonymous]

Hey Everyone,

I have just added a new chase card. I apped yesterday, so hasn't reported yet. As of March, myfico had my oldest account at 102 months and average at 56 months. These are my accounts:

BOA closed card. Had about 8 yrs
Les swaub account. Open 7ish
I have 4 credit cards reporting. The oldest 2 are from Jan. The other 2 from Feb.
I also have a student loan that's maybe 4 or 5 yrs and a car loan that's almost paid and just past 2 yrs.

My aaoa has likely gone up since march, tho probably not by much. I'm going to have this new card report. If I understand this right, my score shouldn't go down unless it drops me into a different aaoa bracket that's lower. Is that true? I already had the inquiry post. So not worried about that. Based on the aaoa that myfico gave in march, is my aaoa going to take a huge hit, or no?

[Revelate]

You have it correct, whether 4->3 years is a AAOA shift not sure.  

Based on my data:

1 <-> 2 Shift

2 <-> 3 No change

[Anonymous]

I have this same question. Through a nifty spreadsheet I found on the forums, I calculated my AAoA to be 9.25 years. I added a ficticious new account to see what it would change to and it dropped to 7 years and some change. Is that good or bad because I have no clue lol

[Revelate]

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@jandemonium wrote:
I have this same question. Through a nifty spreadsheet I found on the forums, I calculated my AAoA to be 9.25 years. I added a ficticious new account to see what it would change to and it dropped to 7 years and some change. Is that good or bad because I have no clue lol

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AAOA north of 5 years is kinda irrelevant in my estimation, diminishing returns.  Number may even be smaller than that on modern models.

[Anonymous]

How bad does your score hurt when dropping a year or two in aaoa if you're around 4.5 yrs or so? My new card is def going drop me, but don't know by how much. I know you can't really calculate with what I've given, but if I drop to 3 or 2, how bad does that hurt from 4?

[Anonymous]

As stated above, it could impact it to some degree.  If you're going from 4 to 2 years you're essentially halving your AAoA which is significant.  How many accounts do you have?  To cut your AAoA in half one needs to open up as may accounts as they currently have on their reports.  So, for example, if you have 5 accounts on your report currently and have a 4.5 AAoA, if you open 5 more accounts you'll be reduced to a 2.25 year AAoA.

I personally wouldn't really suggest that someone open up as many counts as they currently have on their report as halving your AAoA is a pretty significant change.  If you could keep that number to a max of say 50% (ex you have 8 accounts currently on report and open 4 more) you'll only lose 1/3 of your AAoA which in your case would bring you from 4.5 years to 3 years.  Just some things to think about... I'm sure more of the experienced guys on here could venture to guess what the threshold ranges are for different AAoA levels.

[Anonymous]

Hi, there. My accounts are in my original post. One new card has not reported.

[Anonymous]

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@ncochran1989 wrote:
Hi, there. My accounts are in my original post. One new card has not reported.

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If I read your OP correctly, you had a total of 8 accounts on your report and just added a 9th.  If you have a 4.5 AAoA with 8 accounts, adding a 9th only drops you to 4 years which I would imagine is in the same bracket so I wouldn't anticipate that you'd see any score reduction.

[Anonymous]

Yay! Thanks. It's hard to calculate, at least for me it is. If I did it right, myself, I should still stay at 4 yrs. I won't know the true impact right away though. One of my other cards is about to cut with 20% utilization. I dont usually have that high, but i just bought a plane ticket. It will be back down quick though. I only let one card report.

[Anonymous]

I'm almost certain that there's no difference having a AAoA of 4 years vs 4.5 but someone with more knowledge will be able to chime in and confirm that.  Don't sweat a 1 month increase in utilization if you know you're going to be right back down the following month.  No big deal to lose a handful of points one month as long as you know they are coming back the following month which is how it works with utilization.