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Epic Contributor

Re: AAoA calculation - how precise is it?

Kratos-TM wrote:

OhioCPA wrote:

Kratos-TM wrote:

Let me get this straight......If a new account was opened yesterday, it gets 12 months automatically into the calculation, because nothing can be less than 1?

It's the average that can't be below 1 year. That new account will count as zero for calculation of the average age.

Alright next question......let's say this new account is 11 months old. Does FICO still calculate it as zero in the AAoA equation or does the 11 months get factored?

If your answer is zero, then that means that we should see a bump in AAoA when the new accounts hit 1 year (because they were counted as zero the entire 11 months).

The 11 months get factored in.  Here is an example based on 5 TLs.

11 months + 72 months + 8 months + 4 months + 15 months = 110 months divided by 5 = 22 months average.  FICO rounds anything 0 - 23 months down to 1 year so your AAoA would be 1 year.

Message 11 of 12
Frequent Contributor

Re: AAoA calculation - how precise is it?

guiness56 wrote:

Kratos-TM wrote:

OhioCPA wrote:

Kratos-TM wrote:

Let me get this straight......If a new account was opened yesterday, it gets 12 months automatically into the calculation, because nothing can be less than 1?

It's the average that can't be below 1 year. That new account will count as zero for calculation of the average age.

Alright next question......let's say this new account is 11 months old. Does FICO still calculate it as zero in the AAoA equation or does the 11 months get factored?

If your answer is zero, then that means that we should see a bump in AAoA when the new accounts hit 1 year (because they were counted as zero the entire 11 months).

The 11 months get factored in.  Here is an example based on 5 TLs.

11 months + 72 months + 8 months + 4 months + 15 months = 110 months divided by 5 = 22 months average.  FICO rounds anything 0 - 23 months down to 1 year so your AAoA would be 1 year.

Thanks a lot. You broke it down really good. I understand completely.

Myfico scores.....
EX... 805 (11-10-13)
EQ... 810 (12-02-13)
TU... 810 (12-02-13)
Message 12 of 12
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