New Acounts

[Anonymous]

I am curious what FICO considers as New Accounts - open for less than 6 months, one year, teo years?  I have been reviewing Credit Tracker and am receiving a 'D' rating for 9 new accounts however, all y accounts have been open for over a year except for the new car.  Please explain how this works...

Thank you.

[Anonymous]

That's an interesting question.  The score provided by CT is not a FICO score, however, so you can't conclude anything about how FICO defines a new account based on the advice CT is giving you.

Of the nine accounts CT views as new, how many are open credit cards?  (I know that one is a car loan.)

[jamie123]

For scoring purposes FICO considers anything under 2 years to be a new account but there are a couple of steps along the way.

I think it works like this:

under 6 months - under 1 year - under 2 years

After 1 year it doesn't seem to affect scores very much. Maybe a couple of points.

I am curious what FICO considers as New Accounts - open for less than 6 months, one year, teo years?  I have been reviewing Credit Tracker and am receiving a 'D' rating for 9 new accounts however, all y accounts have been open for over a year except for the new car.  Please explain how this works...

Thank you.

The "D" rating that you are referring to however, is regarding your AAoA. (Average Age of Accounts) That is where all your accounts ages' are added together and divided by the number of accounts. This also has some scoring steps but if your AAoA is under 2 years, then yes, that is about a "D" and not good.

[Anonymous]

Props to Jamie.  Great response.

VFleming... my guess is that you have a lot of open credit cards that are all young.  As Jamie says, your AAoA is small, probably a little over 1 year, though if the car loan is brand new and the other cards were opened just over a year ago, then your AAoA might even be less than 1 year.

Having several open credit cards is fine.  Seen as a long term strategy, you are in great shape.  You have several cards (maybe 7?  8?) that if you just keep them open will in 15 years be producing many old tradelines.  But the key is realizing that, if your primary concern is seeing your score go up, your strategy for the next several years should be to stop opening credit cards.  You already have plenty of revolving accounts.  While it is true that one does need a certain minimum number of open cards if one wants to get a very high score, that number is 3.  Having 5, 6, 7 cards doesn't hurt your score, but it does not in itself help you either.

[Thomas_Thumb]

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@Anonymous wrote:

I am curious what FICO considers as New Accounts - open for less than 6 months, one year, teo years?  I have been reviewing Credit Tracker and am receiving a 'D' rating for 9 new accounts however, all my accounts have been open for over a year except for the new car.  Please explain how this works...

Thank you.

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Presented below is a chart from Credit Karma categorizing AAoA by description. Fico AAoA categories (or credit tracker for that matter) won't be the same but this gives you an idea. I put in the letter designators as a potential cross reference.

As your AAoA increases and crosses from one category (or threshold) to the next, it should provide a score boost. The 1st score boost associated with AAoA occurs at 2 years. Age of youngest account reaching 6 months and inquiries reaching 1 year age are generally believed to provide score increases as well.

9+ Years	EXCELLENT [A]
7-8 Years	GOOD [B]
5-6 Years	FAIR [B]
2-4 Years	POOR [C]
< 2 Years	VERY POOR [D]
No Info	N/A