Average Account Age

[Anonymous]

Hi again!

I'm considering getting rid of the HSBC cards that I have. The credit limits are low, the interest is high, and I've recently been approved for better ones that I intend to use instead. HSBC has a freeze on all credit limit increases, so the two cards I have are stuck in a pretty useless state. My oldest account age for all cards is 6.6 years and my average account age is 2.2 years. If I get rid of the two HSBC cards, it will lower my average account age to 1.7 years.

Will this lower my score? From what I understand, my credit score will increase when the average account age is over 3 years. Closing the HSBC accounts will increase the time it takes for my average to go over three years, but will the difference between 2.2yr and 1.7yr average have any effect on me, or is anything under a 3 year average pretty much considered the same from a scoring standpoint?

Thanks for your help!

[llecs]

Make sure you aren't comparing your AAoA with other sites like CreditKarma. They calculate AAoA incorrectly (with respect to FICO scoring). AAoA includes ALL OC accounts, opened or closed, good or bad (e.g. COs). FICO also rounds down AAoA to the nearest whole number. So, if your AAoA is truly 2.2 yrs, then FICO reads it as 2 yrs. And since it includes closed accounts and since closed TLs will continue to report for up to 10 more years, closing these HSBCs will have no impact with regards to length of history or AAoA since AAoA will remain at 2 yrs.

Assuming accounts aren't dropped or added, then after closing the HSBCs, your AAoA will hit 3 yrs by early fall. You might see a bump then. Seems like I did when I went from 2 to 3 yrs. Can't remember exactly though.

[Anonymous]

Good to know. I was considering closing a couple of cards I recently paid off and was wondering how it would affect me. Utilization should not be an issue since I paid pretty much everthing off but a small balance on one account but I was wondering how AAoA would be affected. Now I know !! Thank you.