Average age of accounts describes the overall maturity of the borrower's reported accounts when considered together.
Average age of accounts means the overall maturity of the borrower’s reported accounts when considered together. It is one way to think about whether the file is built on long-standing accounts or mostly on newer borrowing relationships.
Average age of accounts matters because a file with more mature accounts can look steadier than a file made up mostly of recent openings. Older accounts can suggest that the borrower has maintained credit over time instead of only showing a short burst of recent activity.
It also matters because people sometimes open several accounts quickly without realizing that the file can start looking newer and less settled overall.
In Canada, this idea comes from the age of the accounts reported on the Credit Report. It is not always presented to the borrower as a big visible number, but it helps explain why newer borrowing can weaken the maturity profile of the file even if no payment problem exists.
That is why this concept often appears beside Length of Credit History and New Credit. Several recent openings can lower the average age of accounts, while older stable accounts can help keep the file from looking too new.
A borrower has a seven-year-old card and a five-year-old line of credit. Later, the borrower opens three new accounts within one year. The file may now show more activity, but the average age of accounts has become younger because the new accounts changed the mix of ages.
Average age of accounts is not the same as Length of Credit History. A file may have one very old account that gives the history real age, while the average age still drops because several new accounts were added.
It is also not the same as Credit Mix. Mix is about the variety of account types. Average age is about maturity.