What It Means
Average age of accounts (AAoA) is calculated by adding the ages of all your credit accounts and dividing by the total number of accounts. It reflects how long you have been managing credit overall. A longer average age signals stability and experience to lenders. AAoA is part of the 'length of credit history' factor, which accounts for 15% of your FICO score. Opening new accounts lowers your average age, which is why frequently applying for new credit can be counterproductive. Closing old accounts can also hurt by removing long-standing history from the average. The general advice is to keep your oldest accounts open, even if you rarely use them, to maintain a higher average age.
Frequently Asked Questions
What is a good average age of accounts?
An average age of 7+ years is considered excellent. 4-7 years is good. Under 2 years is considered thin. It takes time to build, so patience is key.
Should you close old credit cards?
Generally no. Closing old cards reduces your average account age and total available credit, both of which can hurt your score. Keep them open with occasional small purchases.