Average Age Of Account - What To Include?

[Anonymous]

When calculating AAOA, should I use all TL's or only revolving.  

Some what related question is if the only TL's showing are student loans, no revolving, would it makes sense to add

a revolving?

[haulingthescoreup]

Calculate using every single TL on your report, open or closed, revolving or installment. Calculate each TL's age up to now, even if it was closed 8 years ago.

Adding up to three revolving accounts would definitely help your scores. Revolving credit is riskier than installment, so if you have a clean revolving history, it can be predicted that you're a safer credit risk. Three healthy revolving accounts is all you need for optimal scoring, unless you need to balance out your student loans for a while, so be picky about what card you go with.

It can be hard getting that first revolving account sometimes. You might consider going with a credit union, which is generally more willing to work with those without a lot of credit history.

[Anonymous]

Thank you!

One piece I did not quite understand was your comment:

unless you need to balance out your student loans for a while, so be picky about what card you go with.

[haulingthescoreup]

---

@Anonymous wrote:

Thank you!

One piece I did not quite understand was your comment:

unless you need to balance out your student loans for a while, so be picky about what card you go with.

---

One of the scoring oddities that some people run into is the negative factor of "too many accounts with balances." Most people with student loans get stuck with multiple loans, one for each semester of school. Since all open installment accounts have balances, until you consolidate them after graduation, it's tough to have enough revolving (CC) accounts with $0 balances to outnumber the loans.

This is not a huge ding on your scores, but it bothers the heck out of a lot of people.

I had this going on for a while, and I got a bunch of CC's to cancel out this factor. I killed my AAoA in the process and picked up a couple of dud cards. I should have just waited and let the number of open loans get smaller.

So anyway, if you don't mind putting up with the "too many accounts with balances" ding for a while, 3 cards will be ideal for scoring in the long run.

[fused]

---

@Anonymous wrote:

When calculating AAOA, should I use all TL's or only revolving.  

Some what related question is if the only TL's showing are student loans, no revolving, would it makes sense to add

a revolving?

---

Let me add another type of TL that people don't usually include in AAoA. Charge-offs (not collections) are included in AAoA, rather they're paid or unpaid. I'm not suggesting you have any charge-offs, but if you do, include them in your AAoA.