AAoA vs UTL

[Anonymous]

Hi all,

I've been reading a lot on these forums for a few days now and have learned quite a bit about credit and credit cards.  A lot of you seem very knowledgable about the facts, and at the very least you all have great incite based on experience!

Anyway, I know that AAoA and UTL (which I understand to be the percentage of total credit used up by your current balance) are both a part of your credit score calculation.  But, before I knew about AAoA, I read that opening a few credit cards to increase your available credit would be beneficial to your score, so I went ahead and opened 2 more credit cards.  I don't think I've hurt my score significantly, but I would like to hear what you all have to say about it.  I'm thinking that (in this particular situation) decreasing my UTL was worth it even though it lowered my AAoA.

I don't know how to check the exact age of each of my accounts so I'm just estimating.  I also don't know my 3 credit scores, nor do I know where I can get them (for free, preferably), but my Chase card agreement said my FICO is 716.  

USBANK College Student Card - 25 months, UTL 0% ($0/500) 

Citi Dividend Platinum Select - 4 months UTL 48% ($1920/4000) 

AMEX Clear - 1-2 months UTL 30% (600/2000)

Chase Freedom - <1 month UTL 2% (70/3000)

Assuming AAoA is calculated the same way any average is calculated:

AAoA = 8 months

UTL = 27% It's usually lower than this but I made a tuition payment a few weeks ago and will have my balances paid off in about 2.5 months.

[fused]

Welcome to the forums!

Moving to the Understanding FICO Scoring forum.

[chasmith]

That's a great score, you want to keep it that way.

By opening the new accounts you took two minor negatives, one to AAOA and one from the "hard inquiries".  My experience shows that improivements in UTIL frequently are more impactful than the hit from the inquiries.  Since your AAOA is quite short and you don't have a lot of accounts, having the additional accounts aging will mean the next new account (and no, I wouldn't go out and open another) will have less relative impact on AAOA.

You're really well positioned to sit back, pay everything on time, try to get your UTIL below 10% total, and on each card, get at least half your cards reporting zero balances (but keep at least one reporting a balance), and watch your score grow.

You get the free annual credit reports (no scores) at AnnualCreditReport.com.  You can buy score reports for Equifax and TransUnion here.

[Anonymous]

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@chasmith wrote:

That's a great score, you want to keep it that way.

By opening the new accounts you took two minor negatives, one to AAOA and one from the "hard inquiries".  My experience shows that improivements in UTIL frequently are more impactful than the hit from the inquiries.  Since your AAOA is quite short and you don't have a lot of accounts, having the additional accounts aging will mean the next new account (and no, I wouldn't go out and open another) will have less relative impact on AAOA.

You're really well positioned to sit back, pay everything on time, try to get your UTIL below 10% total, and on each card, get at least half your cards reporting zero balances (but keep at least one reporting a balance), and watch your score grow.

You get the free annual credit reports (no scores) at AnnualCreditReport.com.  You can buy score reports for Equifax and TransUnion here.

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Thanks for the info, and the encouragement  I'm working to get my UTL down now.  I recently did a rough calculating of unnecessary spending over the past 7 months and the number was shocking.  I'll definitely be cutting back and paying down my balances asap.