Does the Age of Youngest Account factor take new installment loans into account?
I.e., if one has not added any revolving accounts in more than a year, but does add an installment loan, would that change one's scorecard?
My present dilemma: I am in the higher scorecard, not having added any new accounts for more than 12 months. I have an installment loan which is running out soon. I am thinking of replacing it with a paid-down SSL (share secured loan), but wonder if the addition of the SSL will cause negative score effects that will offset the positive.
Thanks.
Unfortunately that was not reliable. There were endless discussions between the authors of that self proclaimed "primer" and myself about the fact that they had no backup for their conclusions.
@Patient957 wrote:
@SouthJamaica wrote:Thanks.
Unfortunately that was not reliable. There were endless discussions between the authors of that self proclaimed "primer" and myself about the fact that they had no backup for their conclusions.
Okay, thanks, good to know. I have been relying on the info in that thread, so I will also be very interested in others' answered to your question.
Yeah. I would especially love to hear from someone who's had actual experience with the issue.
The authors of that "primer" thread and I had running disagreements about their "methodology", which was to pronounce many unproven things to be facts, because in the authors' view they were 'common wisdom'. Forum members are constantly citing the "primer" for utilization thresholds, almost all of which were fashioned from whole cloth.
@Patient957 wrote:
@SouthJamaica wrote:
@Patient957 wrote:Yeah. I would especially love to hear from someone who's had actual experience with the issue.
The authors of that "primer" thread and I had running disagreements about their "methodology", which was to pronounce many unproven things to be facts, because in the authors' view they were 'common wisdom'. Forum members are constantly citing the "primer" for utilization thresholds, almost all of which were fashioned from whole cloth.
I'm new here, so thanks for letting me know about the controversy regarding the "primer."
So I actually do have some recent personal experience with the issue, so I'll offer the data points I have.
I opened a Penfed SSL in June, so that account is now 1 month old and is my youngest account. Before I opened that account, my youngest account was a revolving account, an Ally credit card, which is now 4 months old. After I opened the SSL, my "Age of Most Recently Opened Account" under the "Amount of New Credit" category at both MyFico (EQ8) and Experian (EX8) went from 4 months and Fair to 1 month and Poor.
So I conclude from this data that, yes, AOYA includes installment loans.
I know this doesn't answer your entire question, but it's a data point, and hope it's helpful.
Yes I have known that the new installment account would be called a new account both in the MyFICO score interface and in the experian.com score interface, but that doesn't prove that it's a new account in the scoring.
@Patient957 wrote:I also have one more data point that may be relevant. According to the MyFico simulator, on my clean EX8, I can expect to get +20 points in 8 months, which coincides perfectly with that Ally credit card, my youngest revolver, turning 12 months old.
There could be other factors involved, but there's no other round numbers in my profile in 8 months. So maybe this is score sheet reassingment?
The simulator is not reliable.
@SouthJamaica wrote:Does the Age of Youngest Account factor take new installment loans into account?
I.e., if one has not added any revolving accounts in more than a year, but does add an installment loan, would that change one's scorecard?
My present dilemma: I am in the higher scorecard, not having added any new accounts for more than 12 months. I have an installment loan which is running out soon. I am thinking of replacing it with a paid-down SSL (share secured loan), but wonder if the addition of the SSL will cause negative score effects that will offset the positive.
Below is a slide from a now old Fico presentation. One of the scorecard factors for clean files is: Recency of new accounts. The statement doesnot differentiate between installment and revolving credit accounts. Why not? Either the presentation is generalized for simplicity or Fico 8 does not differentiate between account types when assigning a new accounts scorecard.
My take is Fico considers recency of installment and revolving accounts when assigning scorecards. We know the models look at both account types when determining age of file (AoOA). Fico also looks at closed installment loans but not closed revolvers in credit mix analysis. The general concensus is under/over 12 months for youngest account is important for scorecard assignment.
Posters universally mention experiencing a score penalty when AoYRA drops from greater than 12 months to new. However, that score drop is often not observed if AoYRA is over 12 months and the new account opened is an installment loan. There are 3 possibilities for this: 1) an open installment loan under 12 months already existed, 2) Newness of installment loans are not penalized to the same degree that revolving accounts are, 3) the new installment account is the only open one and the score boost from adding it and perhaps paying it down to under 9% overshadows any newness penalty.
SJ - Overall, I think maintaining continuity of an open loan may be more beneficial to you than a likely change to a different scorecard scorewise. You may be in a good position to do some testing.
I believe you currently have an open loan under 9% B/L.
1) Record score and reason statements
Add the new loan before the old one closes.
2) Check score and reason statements before paying down the new loan. (score drop due to high B/L)
Paydown the new loan to under 9% before the old closes
3) Check score and reason statements (score increases back to #1 level?)
Payoff and close the older loan
4) Check score and reason statements (score may drop slightly if Fico looks at open loan AAoA and/or AoOA)