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Question By
jgoggan

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How is the Age of Credit History grade calculated?
This section shows your "Average Account Age" and gives a grade based on that. It then goes on to show your Oldest OPEN Account and your Newest OPEN Account. My question is this: are CLOSED accounts considered at all in this calculation?

In other words, does it help any to close accounts that are less than your average? So, say I opened a new credit card account 2 years ago. I no longer need that card, so I close it. Is that card then removed from the calculation for my "Average Account Age" or is it still included?

I would assume that only OPEN accounts are considered -- but one reply on this site suggests that CLOSED accounts are still included in the calculation for a set amount of time (they suggested 7 years). I'd like to know if that is accurate or not.

Thank you!

- John...

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BUMP...CK's calculation is NOT an avg

Helpful to 2 out of 3 people

My stated Average Age of Credit History on Credit Karma is listed as 2 years 11 months. I have three cards open:

  • 7.92 years
  • 6.5 years
  • 0.92 years

(7.92 + 6.5 + 0.92)/3 = 15.34/3 = 5.11 years

So how is this average calculated? Because it is not a mathematical average or mean. They must be using some kind of weighted averaging that penalizes you for having newer cards. Any guidance from CK would be appreciated!

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K.I.S.S.

Helpful to 7 out of 12 people

DO NOT rely on the Creidt Scores provided by Credit Karma to be accurate.  I have had the same score for 6 months now with them but when I applied to purchase a home my credit score was not 679 it was 703 according to the report provided to me by my lender.  Keep in mind that banks only like cusomters who desire to have debt.  Pay-off a care loan or a mortgage and watch your credit score intially drop.  That is no way to reward responsibility.  But this game is about earning money on those who postiion themselves to have debt not live by the way of cash only.

Keep one credit card (cash rewards) open and use it for groceries and gas if you feel you need a credit card at all.  DO NOT exceed more than 20% of the credit limit.  PAY IT OFF every month.

This site likes to scare consumers into thinking you need to have open credit accounts.  Truth be told you just need to be responsible with all credit situations and pay on time, every month, and you will be just fine.  

Have a plan - Work the plan.  Set a Budget - Live by that Budget.  The rest will take care of itself.  Keep in mind....for most indivisuals who struggle with credit issues its because of spending problems and not an income problem.

Good luck to all.  

Reply by
NODOM1973

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Best Answer! Right on traget about budgeting and paying on time and paying balances off. Watch when your creditors report ... also keep things out of collections.

Overall, it seems that Credit Karma's scores are not accurate compared to the scores the lenders are using ... more on the real lower end. Credit Karma is good for seeing what is on your report but use another company for scores. Remember, you pay for what you get.   

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Most Helpful Response

Only open accounts

Helpful to 4 out of 6 people

The Age of Credit History section is the average age of your open accounts. This is not the length of your entire credit history. Closed accounts are not included in this calculation. When possible, keep old accounts open and in good standing!

Reply by
jgoggan

6 Contributions
15 People Helped
Helpful to 2 out of 2 people

Are you sure that NO closed accounts are included in that calculation though?  That is what I was primarily asking.  As I said, OTHER replies to similar questions on this forum indicate that "recently" (up to 7 years some say) closed accounts are still included in the calculation.

So, as a simplied example...  Let's say I have only two credit card accounts.  One was opened 5 years ago and one was opened 1 year ago.  That means that my "average age" should be ((5 years + 1 year) / 2 accounts) = 3 years (which would be a "D" grade here).  Now, let's say I close that account was only open 1 year.  Is my average age now 5 years (which would jump it up to a "C" grade here)?

If ONLY open accounts are considered, then it should be 5 years.  But if closed accounts are considered for a certain length of time, then it is still only 3 years.

I am very curious how the bureaus calculate that portion of the score.  I often churn cards for sign-up bonuses.  Therefore, I have a lot of "newer" accounts that bring down my average.  I want to know if it is worth it to me to close those accounts after just a year or so.  I want to know if that fairly quickly brings my average back up or if those are affecting my score because of the reduced average age for an extended period (again, up to 7 years according to some answers here).

 - John...

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*bump*..same question here..

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This looks like an old thread but.. BUMP

The way the average age is calculated confuses me.  I recently closed two annual fee credit cards and my average age went down instead of up... technically my oldest card (almost 4 years old) should pull the average upwards.  How does it work?

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