AoYA and Fico8

[xenon3030]

What is the estimated correlation between AoYA and Fico8?

I saw that if AoYA becomes zero, Fico8 drops by ~11-14 but it recovers in the next month. I would like to know if AoYA varies from 1m to 12 m, or its year tier changes from 0y to 1y, how the Fico8 changes. Let's assume that the year tier of AAoA does not change by aging.

[Anonymous]

Some folks may not know that you are refering to Age of Youngest Account.

That, along with Age of Oldest Account and Total Number of Accounts, are the three factors used in scorecard assignment for clean profiles in FICO 8.  The algorithm used to take those three factors and switch a person from one scorecard to another is a proprietary secret.

Scorecard assignment for dirty profiles is done differently.

I think that most people guess that there is no advanatge to AoYa exceeding 13 months.  Some think it is binary -- either 0-11 months or 12+.  It might be tri-valued (0-5, 6-11, 12+) too.

Thomas Thumb knows a fair bit about it.

[Anonymous]

I would say the "recovers the next month" part is inaccurate regarding an 11-14 (hypothetical) point drop in AoYA going to zero and then back to 1 month.  I personally have not heard of someone gaining all of their lost points points back related to an AoYA drop in just 1 month. 

[Anonymous]

Lots of data points with people with relatively "average" positive profiles show the AoYA hurts the most at 0-3 months but seems to alleviate itself around the 6th or 7th month, especially in regards to credit card account data points.  Installment loans are much more complicated because the type of installment loan and the length of the loan and the interest rate can affect scoring and change how fast FICO points are returned to a person.

But you may still have to recover from any AAoA decrease as well.

I use an AAoA forecaster to keep track of my AAoA now and with "what if" situations.  Basically I look at what my AAoA is and what it would be if I apped on a given future month.  So I take into account AoYA but I also consider AAoA before apping.

One of the benefits of "gardening" for 12 months from the last app is that it gets rid of any possible AoYA penalty, and it lets your AAoA grow, and inquiries have no value anymore.  This can give a pretty hefty FICO boost when all things are considered -- I've personally witnesses folks getting 40-60 points just for doing nothing for 12 months other than maintaining healthy (low but not zero) utilization and avoiding any new apps.  And these are folks generally in the 700s already, but of course, YMMV.

From what I've analyzed, you can lose 20-30 points for max inquiries, 5-10 points for new account penalty, and anywhere from 0-15 points for slaughtering your AAoA.  A year can help with all of these things but no one knows exactly which categories the FICO point boosts come from.

[Thomas_Thumb]

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@xenon3030 wrote:

What is the estimated correlation between AoYA and Fico8?

I saw that if AoYA becomes zero, Fico8 drops by ~11-14 but it recovers in the next month. I would like to know if AoYA varies from 1m to 12 m, or its year tier changes from 0y to 1y, how the Fico8 changes. Let's assume that the year tier of AAoA does not change by aging.

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Fico has a reason statement "Too many accounts opened recently". This implies that quantity of accounts opened in "a recent time period" is a factor. The unknown is what defines recent and what span of time does it include? My guestimate on recent as it relates to a grouping together for count is the most recent 90 days.

If one has a relatively thin or young file, addition of a single new account represents elevated risk. If the file has no other "recently" opened accounts then the hit for a new account. If the file had a recently opened account then the hit for "too many". Either way, a score drop greater than the 3 to 5 points typical with an inquiry.

It is not unusual for a score boost after a new account reports and subsequently shows an ontime payment or payments. The payment signifies ability to manage the debt. From what I have seen posted, a single satisfactory monthly payment on a revolving account with a subsequent "low" reported utilization can be enough to recover some points. 

A similar risk assessment appears to apply with installment loans but the slight rebound may take 90 days (3 months of ontime payments).

Age of youngest account crossing 12 months has some significance and there may be separate scoring bins for revolving vs installment accounts. "opened recently" is hard to nail down but, I have seen VantageScore reference 3 months (90 days) for new account impact.

[Revelate]

I got no movement nor reason code shift when my youngest account ticked over the six month mark: complete non-event.

Dirty file, I never ever took any hit or got any increase when my youngest account aged over a year; as CGID suggests it doesn't appear to be a factor (nor a reason code that I saw at any rate, had to get clean for that one) in any FICO model I have access to.  

It's probably a year for the first breakpoint would be my guess on clean files, actually mine's coming up fairly shortly (couple of months) so perhaps can see concretely.

[Thomas_Thumb]

It would be interesting to get some data from those that received one of the below reason statements:

a) "Time since most recent account opening is too short" 

b) "Too many accounts recently opened"

What was the age of the youngest account for "a" ?

For those that received "b", what was the age of the youngest account and how many new accounts did you open within 30 days, 60 days and 90 days of the youngest account?

[Revelate]

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@Thomas_Thumb wrote:

It would be interesting to get some data from those that received one of the below reason statements:

a) "Time since most recent account opening is too short" 

b) "Too many accounts recently opened"

What was the age of the youngest account for "a" ?

For those that received "b", what was the age of the youngest account and how many new accounts did you open within 30 days, 60 days and 90 days of the youngest account?

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From my own current reports though:

Last account opened January 2017

2 accounts opened in January 2017.

 You opened a new credit account relatively recently

EQ FICO 8 and 5 (November pull - might be FICO 9 too but I have an interesting reason code here that I'll detail at bottom)

EX FICO 8 and 3, BC 9  (August pull)

TU FICO 4 (September pull, assume it would be on FICO 8 too but my 10/2015 30D late is complained about there as top dog)

You've recently opened too many new credit accounts.

EX FICO 2 models only, nowhere else, 2 accounts 7 months prior, everthing else was more than a year old

Anyway the interesting one for you TT, EQ FICO 9 on a maxxed out revolver:

1. You've made heavy use of your available revolving credit. 

EQ FICO 9; also see it on TU AU 8 of all things, and TU BC 4.  I don't see it anywhere else on EQ.

[Thomas_Thumb]

Here is something to mull over. See below paste. For the July pull I had 5 of 6 cards reporting balances - including AMEX at 100% B/HB. For the August pull I had 2 of 6 reporting balances (AU card and AMEX still at 100% B/HB). The last card/account I opened was a Best Buy store card 9/2011. Why would I get "you opened a credit account relatively recently"? Could recently mean within the last 5 years? I doubt it!

The only thing I could think of was the conversion of my Fidelity Visa card to Elan from BoA in mid 2016. However, my reports still show (as they should) the original account open date of 12/2006 for the card.

Side note: Fico 98 and Fico 04 always include AU cards but, the AU card is not included in the AG UT% displayed above the respective scores. As mentioned in other posts, my industry enhanced Fico 8 scores dropped in August vs July - inline with the "no revolvers reporting a balance penalty". Thus, the realization (for me) that AMEX charge and AU cards are not counting toward Fico 8 revolving utilization.

[HeavenOhio]

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@Thomas_Thumb wrote:

It would be interesting to get some data from those that received one of the below reason statements:

a) "Time since most recent account opening is too short" 

b) "Too many accounts recently opened"

What was the age of the youngest account for "a" ?

For those that received "b", what was the age of the youngest account and how many new accounts did you open within 30 days, 60 days and 90 days of the youngest account?

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I most recently opened an account on 2017-02-19. I have four other fairly new accounts that aged past a year in September and October.

Scores with "Time since most recent account opening is too short," "Too many accounts recently opened," or something similar as of my 2017-11-24 report:

EQ FICO 5 (813): You opened a new credit account relatively recently.
EQ FICO Auto Score 8 (771): You opened a new credit account relatively recently.
EQ FICO Auto Score 5 (831): You opened a new credit account relatively recently.
EQ FICO Bankcard Score 8 (818): You opened a new credit account relatively recently.
EQ FICO Bankcard Score 5 (819): You opened a new credit account relatively recently.
EQ FICO Score 9 (795): You opened a new credit account relatively recently.
EQ FICO Auto Score 9 (805): neither
EQ FICO Bankcard Score 9: ((806): You opened a new credit account relatively recently.

TU FICO Score 4 (793): You opened a new credit account relatively recently.
TU FICO Auto Score 8 (799): You opened a new credit account relatively recently.
TU FICO Auto Score 4 (781): You opened a new credit account relatively recently.
TU FICO Bankcard Score 8 (805): You opened a new credit account relatively recently.
TU FICO Bankcard Score 4 (820): You opened a new credit account relatively recently.
TU FICO Score 9 (803): score too high to show any reasons
TU FICO Auto Score 9 (811): You opened a new credit account relatively recently.
TU FICO Bankcard Score 9 (813): You opened a new credit account relatively recently.

EX FICO 2 (798): You've recently opened too many new credit accounts.
EX FICO Auto Score 8 (762): You opened a new credit account relatively recently.
EX FICO Auto Score 2 (783): You've recently opened too many new credit accounts.
EX FICO Bankcard Score 8 (793): You opened a new credit account relatively recently.
EX FICO Score 3 (798): You opened a new credit account relatively recently.
EX FICO Bankcard Score 2 (812): You've recently opened too many new credit accounts.
EX FICO Score 9 (790): neither
EX FICO Auto Score 9 (799): neither
EX FICO Bankcard Score 9 (802):neither

As an aside on this, my TU FICO Bankcard Score 8 my EX FICO Score 2, and my EX FICO Bankcard Score 8 say "You have too many credit accounts with balances," even though only one of my six revolvers is reporting a positive balance. My second balance is my gas/electric bill.