What determines "aging" of accounts

Discussion in 'Credit Talk' started by Jim, Jun 4, 2001.

  1. Jim

    Jim Well-Known Member

    On another thread, Marie brought up an important point about "aging" of accounts, and the benefits that accrue to us as consumers, by having well established credit lines vs. new credit.

    This has been kicked around the board since last fall when I arrived. What I have read here appears to indicate that new accounts hurt us for a year. I disagree with this. I think they hurt until they go R1, which can be in as little as 3 months.

    Here is my question? If you get maximum benefit from an account you have had 36 months as has been indicated on the board by some members.

    Does the 36 months mean 36 months of activity or just owning the account for 36 months whether you used it or not.

    I think you have to use the account regularly to get the benefit. But I can't prove it.

  2. DaveLV

    DaveLV Well-Known Member

    I think we might be confusing the two issues of what constitutes activity as far as the creditor that is reporting you is concerned and what constitutes activity to a potential creditor.

    Your current creditor is not going to be fooled if you never use your card, and isn't likely to want to upgrade you.

    A potential creditor can only see the length of time the account has been opened, your high balance, credit limit current balance, current payment due and in some cases a balance history and recent payment. I'd say that if you at least let an account report a high balance for at least one month and then let it just sit there and report, there really isn't a lot a potential grantor of new credit can do. They don't have the day by day detail that your current creditor does, and to them it looks like a good account.

    Now, my Nextcard account that I opened in March is already reporting R1, so I have to believe that a potential creditor (or the FICO formula) takes into consideration how many months the account has been reported in addition to the "R" status. It's only logical. As for when a new account stops hurting you -- who knows.
  3. Jim

    Jim Well-Known Member

    Thanks for your comments Dave,

    I live in California and at this moment I am looking at my Experian report. In CA. it seems that nearly all creditors pull EX to determine whether you get a new account or not.

    There is a whole section of the report called "Your use of Credit". It is 24 MONTHS of balance history and constitutes 2 pages of my EX report. Every account on this section has been used every month over the last 2 years by me.

    When a lender pulls EX, they see exactly how much I charged every month on every account for the last 24 months. I suspect that this is part of the EX FICO score and is considered by any lender as to whether they will extend credit to me.

    My personal feeling is that I did myself a favor using the accounts every month. I shudder to think what it would look like if I had accounts and never used them.
  4. DaveLV

    DaveLV Well-Known Member

    I've never seen a "factory" printed Experian report, only the online version -- only a few of my accounts show history like that on the online version.

    I have seen Equifax and TU reports from my Lexington disputes, and those reports have no such sections. I agree with you that Equifax seems to be the most underutilized agency -- at least for me. I only have one hard inquiry on my whole report, and that's in September 2000. And THAT was Discover (an existing creditor -- so it probably should have been a soft inquiry). Associates and AT&T pulled soft inquiries and those were the only ones this year.

    I wish more creditors pulled Equifax. They are my best report, and the only one that does not show my state (CA) tax lien.

    Do you think TU and Equifax maintain sections like Experian has and don't disclose them to consumers?
  5. Marie

    Marie Well-Known Member

    Certainly I agree that we can't fool our own creditors. They know if we're active or not.

    This issue has come up with me a lot because I'm in contention with Equifax. On my Equifax report, it has a column titled "months reviewed".

    Now here's the rub. When I applied for a Citgo card I was told if I only had 3 tradelines for 24 mos I'd get one regardless of the bk (because I was already est again on credit and the bk was over 2 years old).

    Now, I DO have that. But if you read my report and rely on the "months reviewed", I don't.

    One tradeline was open for 87 months. Yes, over 7 years. It shows under "months reviewed" as 12 mos.

    My student loans are all 4-5 years old, but some were deferred while I did 2 masters degrees. Several were only in repayment for several months and then I consolidated.

    Result: 3 mos, 4 mos, 6 mos in the "months reviewed" column.

    Now, for Fico, I don't know what's used. Fair Isaac isn't too fair and won't commment on what data the formula takes into consideration.

    I believe on a manual review, which Citgo did do for me, I think they scanned the "months reviewed" column and called it a day. Since I can't actually tallk with a credit analyst, that was that. (I know I could have negotiated a credit card if I had only been given the chance).

    So in my latest rounds with Equifax, one of the contentions is whether months reviewed is an internal Equifax number or a number truly generated by the credit grantor.
    One lady told me it's the months NOT open, but the months that the credit grantor reported ACTIVITY. Ok, so if there's no payment, no charge... no activity???

    But what about accounts that only report every quarter??? Then I'm automatically going to take 3 times the amount of "reporting time" to generate 1 year of activity under months reviewed???

    again, no clear answer. Then I was told it would be an item that had to be verified... Gimme a break.

    If you have date opened, date closed... do the math and correct it.

    But if it doesn't affect fico, then what is the point in having it?? For manual reviews?? If it's for manual reviews then it's pertinent.

    And I can't get any straight answers. This is actually a very big contention for me because my account aging looks like it's total 1 year (if you add up the months reviewed and divide by number of accts).

    But in reality I have several years. I think we should get credit for accounts we have open and are good but perhaps didn't use that month. We're still as responsible for the payment history and if we choose not to use it for a month or two... are we being penalized by our score?

    The other thing I noticed on the eloan was that under 36 mos you seem to take a negative hit on score... and that they consider 7 years to be optimal for account history. And since I've seen the 36 month issue several times I'm taking that one to heart. I'll have a min of 36 mos activity every month on all my cards and then I'll reevaluate.

    Ok, this post is long enough. Feedback anyone?
  6. Jim

    Jim Well-Known Member


    I can't answer your question about EQ and TU. But I suspect the worst. Again, it is just an opinion.


    I agree with every word you said here. Credit establishment and credit recovery is dependent on extensive use of credit not just owning the account(s). In my humble opinion.

    To: Everyone,

    This is why I have a structured plan to make 114 on-time payments this year. In 2002, I will make 132 payments. Everything is planned.

    I don't like to shop. I took a small cash advance on my Nordstrom card and paid it back over 3 billing cycles. Of course, I could always loan the card to my daughter. In 10 minutes, 24 months will be takesn care of. LOL Oh well.
  7. Marie

    Marie Well-Known Member

    Well Jim, if you're having trouble using that Nordstrom account just send the number this way ;) We just got one at Perimeter Mall in Atlanta... but I visited and just about passed out at the prices.

    Nice, but you'd need a hefty credit line to buy a coke in that store. :)

    Cash advance on a dept store card? Is a major credit card too? Never heard of a cash advance on a dept store card.

    GEORGE Well-Known Member

  9. Jim

    Jim Well-Known Member


    Nordstrom is a very unusual card. I have a $2K limit but can access $300 in cash at any ATM.

    My $40 cash advance cost me $4 total. Paid back as $20, $20 and $4. Over 3 months.

    Nordstrom is high priced but very consumer friendly.

    Twice a year, Nordstrom descends to normal hgh end pricng. On June 6th a decent will happen. My daughter will be shopping for my present using my card.

    Many people have a Nordstrom card to take advantage of the twice a year sales.

    For more info do a search on Nordstrom here on the board.
  10. Marie

    Marie Well-Known Member

    It's 1am here and I'm working and packing for a trip to NY tomorrow... hence I'm being a bit lazy :) Have the computer running in the background.

    Remind me if you would be so kind. I remember you got the Nordstrom earlier in your credit quest...

    Do you remember who they used and an approx of what your score was when you were approved?

    Just wondering if they pulled a Nonbk report for you or if they hit one with the bk... I certainly wouldn't need 2K on any dept store card. 500 would be fine.

    By the way, that's sweet that you let her buy your present with your card :) When I was younger and using my allowance my poor Dad got lots of Old Spice because I loved it. Sweet guy wore it. I hope he really liked it some :) It was in my price range then. Now he gets great clothes (he counts on my to help dress him). Course, he only keeps what my brothers don't steal from him first :)
  11. Marie

    Marie Well-Known Member

    thanks :)
  12. GEORGE

    GEORGE Well-Known Member

    * Please send me mailings

    * Please omit perfume mailings

    * Please omit lingerie mailings

    * Please don't send me any mailings

  13. DaveLV

    DaveLV Well-Known Member

    Is there a place to click "PLEASE send lingerie mailings?"

    I don't even want to apply for a card -- I just want the darned mailings!
  14. GEORGE

    GEORGE Well-Known Member

  15. GEORGE

    GEORGE Well-Known Member

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