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Question By
wyrick0

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I dont understand Avg. Age of Open credit Line.
I dont understand the report on Avg. age of open credit lines it says I have a D for a grade, but I have had my credit cards for awhile I am on time with payments and credit Karma is showing 740. it says I am 22% higher than other user's. What am I missing?

Also I am not sure if credit Karma is correct with my score. I know there are 3 other major credit companies that ppl look at. Some are lower and some are higher when I ask about my credit score. But I dont want to walk in somewhere and they tell me that my credit score is to low. How do I know that credit Karma is not giving me a bad score? I need to know if my score in good standing with other companies. My score is 740 with credit Karma, I hope my score is good if I were to buy a car. I dont want to walk in and them telling my that my score is 450 and credit karma is telling me that it is 740. I have not missed a single payment and I am paying off credit cards. But you never know.

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Helpful to 3 out of 3 people

This thread is 8 years old but still relevant. Noone has an explanation for this absurdity of averaging open accounts as a metric for your experience with credit? I have come across some dumb things by large organizations in my lifetime but this is at the top of the list. The problem is when you get a lot of 'smart' people in a room they often overthink and debate to the point of being completely illogical. It happens everywhere. Though when it comes to credit there should be some sort of fault prevention when they come up with these completely illogical ways of judging people. They are destroying lives as a result of their stupidity. 

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Brian

Helpful to 4 out of 5 people

Credit age is determined in a way to benefit the credit market at the expense of the consumer. You're credit age is when you first started using credit (so long as a single account remains open). However, credit card companies, credit bureaus, and sites including free credit report and credit karma all accept an unethical practice of requiring accounts stay open so they are prone to charges, and then averaging the age of these accounts. Insurances can be paid by the credit market to levy a massive identify theft outbreak environment in which credit bureau's would be able to post massive fraud sales and rack up earnings through their 2-4% take. Cardholders are protected from unauthorized charges, but there is still room for unethical play. Simply put, the credit market wants you to use credit at any cost even if ethical lines are crossed that promote the use of more credit in order to have good credit. Credit is a bad judge of solvency, with integration of debt to income and fairer metrics (like with age) the credit market could provide a great outlook on solvency. If you were a millionair and never used a credit card, made $100k a year, your "credit" would be worse than a teenager working at mcdonalds. When somethings in life make no logical sense you only hope its not for unethical reason, unfortunately the credit market is not an ethical market. Similar to the jewelry market, its all run by the same filthy people.

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Closed Account Are Not Calculated

Helpful to 2 out of 2 people

I've been seeing a lot of misinformation from people on this topic. At least on Credit Karma, only OPEN accounts are calculated in the average. It's even titled "Average age of your open accounts". Any old closed accounts (my oldest car loan for example) is not included in the age which hurts my average credit age unfortunently because it would be a year higher if that was also included.

What I can't figure out however is this the same way for FICO as well (they only average open accounts)? 

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Average Age is a Bad Metric

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I don't understand the use of average age either.  A credit card is a credit card. You either know how to use it or you don't. If you have one card that's 10 years old but get another one that's one day old, suddently your average age is cut in half. Open up two more and you're now in "danger" territory and seem to have no experience with credit. Credit card companies come up with all kinds of new cards and incentives, and it shouldn't affect your credit just because you're trying to get the best deals. It's a good thing auto insurance companies don't use the same logic as credit card monitoring companies; otherwise, the length of your driving experience would depend on the average age of the cars you own. 

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Helpful to 1 out of 1 people

Unethical is a word missing from my previous post. The average of open accounts is a joke on credit users to benifit the banks in some way. Closing cards is not goof for them. So we are the stupid one's for not rebelling against this and just putting our tail between our legs as we nod to the bullying. 

Reply by
hoodun

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*good

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Clarifying things

Helpful to 7 out of 7 people

Though this is an old post, it still comes up when you look up how to calculate AAoA, I'd like to add something to help new users. First, the score from this site isn't the actual score a lender will pull (lenders usually pulls a variation of FICO, which you have to pay to see unless you have a particular product that offers it for free such as a walmart card). This website only offers information from Transunion and there are 2 other bureus (equifax and experian) and the score may vary between the 3. Second, AAoA takes into account ALL your accounts, open and closed (closed will count for 10 years after closing) so you won't see a drop in scores from closing a card unless you need it to keep Utility down, in which case you should either bring balance down or keep the card open.

AAoA is calculated by adding all accounts, example:
1 closed account aged 5 years

2 open accounts aged 4 years

1 open account aged 1 year

total age: 14 years

oldest account: 5 years

AAoA: (5+4+4+1(/4)) = 3.5 years.

While credit karma is a useful website, it should only be taken as a free report and free monitoring service.

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Average Account Age Calculated

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I am still confused by how the "average" account age calculated? My oldest open account is 31 Yrs .  Newest open Account is 6 Mos.  Credit Karma reports my Average Account age is 6 yrs 11 Mos. I have had many, many accounts, loans, mortgages, lines of credits, etc. opened and paid off over the last 30 years.  I have over 25 accounts open and/or paid off  (I was told to never close them) and 3 having a balance.  Most of them were opened/paid off over 15 years ago.  Credit Karma reports my Average Account age as being 6 yrs. 11 mos.

How is the "average" calculated?  Would it help if I "close" my newest accounts? 

Will it help to close the newest accounts?

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Helpful to 0 out of 1 people

 Get your credit reports and credit scores from all three bureaus a month or so prior to applying for a loan. Correct any mistakes and when you get your updated reports take them with you. This way you will know if they are trying to pull any funny stuff. If they do walk away and shop elsewhere. 

Reply by
Nebaum

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Helpful to 3 out of 3 people

You should pull a credit report once wvery four months for free. I have mine on my calendar. Transunion, then equifax, then experian. Thats just my order. That way, you have a good report every four months and can correct errors early.

Reply by
2Lr

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5 People Helped

I believe there should be a way for consumers to lobby and change this, however people just fuss and do nothing. I have never been late on a payment or missed any 100 percent payment but it is a very small thing to credit agency. I pay my bills and have for 50yrs. Why is my credit low when I pay cards off and when an emergency comes up and I use them it tanks my credit. The whole thing is a scam IMHO

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Helpful to 1 out of 4 people

Average age of credit lines is the average time you've had credit reported.  Say you had a credit card for 10 years.  Which is a good credit history, ok, you apply for and get a second.  2 cards with a max 10 years of history.  This second card cuts your history in half to 5 years.  A 3rd card would reduce history to a 1/3.. 3.33 years and so on.  

In a nutshell average age of open credit is the total time you've had credit divided by the number of credit cards you have..

Credit karma pulls transunion, one of the 3 CRA's.  So you know 740 is close to transunion atleast.  Equifax and Experion could be off by 100 points because sometimes accounts aren't reported to all 3 CRA''s.  The only way to know is to pull your reports and check your scores. 

You can take confidence in knowing atleast 1 of your scores is good and most likely the other 2 are too.

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