Consider the age of each account when determining how long you have had credit history. As an example, suppose you have three credit accounts: Card One has three years of age, Card Two is five years, and Card Three has one year. Your credit history age in this example is three years.
15 points
The length of your credit history can have a big impact on your credit score. Credit scoring models factor in how old your oldest account is when determining your score. Your credit report will reveal how old your oldest accounts are. This information can be used to improve your credit score. However, the average credit score in America is 711; there are many things you could do to improve your score.
128 points
By paying more than your minimum credit card payment and reducing your total credit card debt, you can improve your credit score. You should also set your own credit limit to avoid going over it. Lenders will be looking for evidence of credit management that has been consistent over time. The length of credit history is worth around 128 points. It shows when your first accounts were opened and when you made the last payment.
Although you are not eligible for a loan or creditcard if you have a credit score below 128, there are still ways to improve your credit score. It can take several years before your credit score reaches a high level but it is possible.
Age
Your credit history is one factor that can influence your score. Your score will rise if your credit history is older. Your score can be affected by closing credit accounts. There are ways to reduce the negative impact of closing credit accounts.
The average number year you have been with the same type of account is what determines the age of credit history. The average age of three credit cards is three years. Your credit age would be seven if you have more than five credit cards.
An in-depth inquiry
You can manage your credit score by being diligent and monitoring it frequently. Many banks offer free tools to help you check your credit score. Experian offers access to your FICO(r), Score for free. You can minimize the impact of hard inquiries by monitoring your credit reports regularly.
Lenders will ask you for a copy if your credit report is needed to approve you for a loan. This is known as a hard inquiry, and it will lower your credit score by a few points. However, these inquiries will stop being calculated in your credit score after a year. After two years, they will disappear from credit history.
Average age for account
It is important to look at the average age of all your credit accounts when you are looking at your credit history. A long history will increase your credit score, while a short history will decrease it. You age, demographics, and many other factors can impact how long your credit history lasts. Credit accounts that are open and current can help increase credit history's average age.
A long credit history is a benefit when you apply for a loan or a credit card. Opening new credit accounts will lower the average age of your history. If they do not help you to reach your goals, you should be cautious about opening any new accounts.