Average Age of Accounts (AAoA)
Average Age of Accounts (AAoA) is a credit metric that calculates the mean age of all credit accounts listed on a credit report, reflecting how long a consumer has been managing credit. This is evaluated within Credit History Duration & Age.
Plain-Language Meaning
This term refers to the average length of time your credit accounts have been open, providing a snapshot of your overall credit history’s maturity.
Practical Example
If you have three credit accounts that have been open for 2, 4, and 6 years, your AAoA would be 4 years, showing how long you have, on average, maintained credit relationships.
What It Does Not Mean
This does not represent the age of your oldest account or the total number of accounts you have; it specifically measures the average age across all open and closed accounts on your credit report.
How It’s Calculated
The system calculates AAoA by adding up the ages of all credit accounts (open and closed) and dividing by the total number of accounts, resulting in a single average figure that reflects credit history length.
Common Misconceptions
- “AAoA only includes open accounts.” Closed accounts are also factored into the calculation as long as they appear on your credit report.
- “AAoA is the same as the age of your oldest account.” AAoA is an average, not the maximum age among your accounts.
- “Opening a new account won’t affect my AAoA.” Adding a new account lowers the average age, which can impact your credit score.
Related Pages
Related Glossary Terms
FAQ
- Does AAoA affect my credit score? Yes, a higher AAoA generally indicates a longer credit history, which can positively influence your credit score.
- How long do closed accounts count toward AAoA? Closed accounts typically remain on your credit report for up to 10 years and continue to be included in AAoA calculations during that time.