It's best to have 3 revolvers for which they are the primary account holder to optimize FICO. Being an AU can help, but does not have the same effect as a primary account. Also - keep in mind, some bureau FICO algorithms exclude AU accounts from some, or all, aspects of scoring (such as utilization and age).
For example, in my case - EX and EQ both consider my AU for calculating utilzation, but not for 'average age of accounts' or 'oldest account'. However, my AU is considered when caluculating 'length of credit'.
@Anonymous wrote:
@Anonymous wrote:It depends on whether or not the AU account "counts" or not on your CR. Some do, some don't.
I'm not sure what you mean by this -- I'm told by the lender (Synch) it will report. I'd appreciate any additional detail.
What BBS means is that - even if the AU reports to all 3 bureaus, the account may be "flagged" by that bureaus algorithm and not considered at all in scoring. The account will show up, and update every month, but it will have zero affect on any aspect of FICO scoring. We don't really know exactly what causes an AU account to flagged - though it's believed to be associated with presumed abuse of Authorized User accounts (even if that's not the case).
@Anonymous wrote:
@tmr It was my understanding that you test an AU to see if it is affecting utilization, and if it is, you know it also will affect aging categories.
This is the first I have heard that it can count for one aspect such as utilization but not for other aspects such as age. Any more information you can give?
Perhaps I should have used the word "appears" in my post --- it's all speculatory.
So, my AU only reports on EX & EQ, and outside of the AU, all info on all 3 reports is exactly the same - so I'm able to compare certain things. I know for sure that EX and EQ consider my AU for util because if there is a balance on my AU, with all others at $0, I'm not penalized. My aggregate util also differs when comparing EX and EQ to TU because there is a $20K difference in total credit limit.
However - when looking at my age of accounts, all 3 bureaus display the same info for AAoA & AoOA -- all based on my primary accounts only. But for 'Length of Credit', they differ - TU shows Length of Credit based on my oldest primary (obviously), while EX and EQ show length of credit based on my AU - which is my oldest account on those reports. But if the AU was factored into my AAoA on EX and EQ, then AAoA would be 2 months higher; if the AU was factored into AoOA, then that would be 2 years higher on EX & EQ. Also,when my AAoA - including the AU - crossed known thresholds, I saw no change in score; but when my AAoA -- not including AU -- crossed known thresholds, I saw a change in score.
My AU hit 8 years on EX and EQ at the same time my oldest primary account hit 6 years on all three bureaus. All three scores decreased on this day (2/1) with no other changes to my reports. I came to the conclusion that this was some sort of scorecard segmenation (my reports were also still dirty at this time). But the drop in scores differed greatly when comparing EX and EQ to TU:
EX: -15, EQ: -25, TU: -5.
So this led me to think that perhaps the AU, being considered for Length of Credit, in conjunction with only my primary account aging to 6 years being considered for AoOA, caused me to enter a different scorecard on those two bureaus, accounting for the excessive drop in scores. TU only had the primary account cross 6 years - accounting for both AoOA and Length of Credit, so that put me into a another different scorecard which resulted in only a 5 point drop.
(I hope that made sense...)
So... all of that is how I determined that my AU is considered for some FICO categories, and not others. Of course, I could be totally wrong... but it's the only thing that makes sense to me.
@Anonymous wrote:
@tmr: Yes, I follow you perfectly; understand exactly what you’re saying. You are very articulate.
From what I have learned, what the software displays for your aging characteristics can be dismissed, and you have to calculate it yourself. With that being said, what is the difference between length of credit and AooA? I thought they were the same.
You said you noticed differences when you passed certain AAoA thresholds, excluding the AU. Which thresholds would that be?
I totally agree, I think you got re-bucketed. And looking at the difference in score change, I wonder if that could be because of difference in utilization at that time due to differing aggregate limits, or because of time since dirties, or if they crossed different thresholds six years and eight years for AooA. What if there’s a six year and eight year threshold and each one dropped into different scorecard? You could possibly lose more crossing the higher threshold because you go to the bottom of a better score card.
What was the effect of everything going clean this month?
Yes, I've always understood the same about CMS reports, so I began calculating my account ages myself -- i maintain a spreadsheet to auto-track all aging catagories so I can better evaluate any non-obvious FICO changes. My calcs match my CMS report data in all areas.
I, too, thought Length of Credit and AoOA was the same -- that would make sense... but then I researched a bit when I came across the descrepency with my AU account and found the following:
FICO breaks down 'Length of Credit' into 3 parts:
(1) How long accounts have been open
(2) How long specific account types have been open <--- this is key I think in my case
(3) How long it's been since those accounts were used
When considering 'Length of Credit', the FICO scoring system also evaluates the age of your oldest and newest accounts, along with the average age of all accounts (all this per FICO scoring expert, Gary Paperno who has worked for FICO & Experian).
The thresholds I noticed were AU hitting 6 years - no score change and I'm almost certain that is supposed to be threshold for AoOA; AAoA, not including the AU, hitting the 2 year mark (score bump); and AAoA, including the AU, hitting both 2 and 3 years (no score bump). I haven't managed to hit 3 years AAoA with only primary accounts because I opened new stuff... I'll hit that this year though -- in 8 months.
The rebucketing due to aging --- I thought about util being the reason for the score diffence to --- but at that time, there was only a 3% difference in util between EX & EQ vs. TU. EX & EQ were at 10% and TU was at 13%. So that seemed unlikely to be the reason for the point loss differences.
Also considered the 'time since dirty' factor -- and my paid charge off did age at that time also - the DOFD hit a 5 year mark on 2/1 as well. But still... seemed like that would have the same effect on all bureaus because it is the same on all bureaus... with the only difference being the AU account, why would the derog factor to be measured differently?
"What if there’s a six year and eight year threshold and each one dropped into different scorecard? You could possibly lose more crossing the higher threshold because you go to the bottom of a better score card." <<< THIS is exactly what I would've believed happened if it weren't for other experiences... when my AU hit 6 years, there was no change in score. This is when I began believing my AU did not count as my oldest account - that it wasn't just the CMS telling me that.
What was the effect of everything going clean this month? <<< LOL.. *sigh*. My FICO 8s all dropped again. They dropped on 2/1 from the aging and again a week later when moved to a clean report:
Jan 31st (dirty): EX 767, EQ 760, TU 754
Feb. 1st (dirty): EX 752, EQ 735(!), TU 749
Feb. 8th (clean): EX 743, EQ 727, TU 725
Of note: The removal of the CO only dropped my AAoA 2 months -- not crossing any known thresholds. However, this account was my oldest Revolving account (not including the AU). Now, my oldest revolving account is only 1.4 yrs. This seems to be somewhate of a factor as now one of my negative reason codes for all 3 bureaus is 'Short Revolving History'.... never had that before.
I also don't get why EX is so much higher than EQ... I think it may be because EX doesn't penalize as heavily for high loan balances...?? Insanity..
So, I don't know anything for sure.. it just seems that my AU account is not factored in traditional manner of account aging. I just plan to keep watching what happens as my accounts age and see... my AAoA including the AU will hit 3 years four months before my AAoA without the AU will... so I'll be able to compare score changes at that point including / excluding AU.