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
Your credit score can be affected by the length of your credit history. Credit scoring models take into account how old your oldest credit card is in determining your score. Check out your credit score to see how old you oldest account is. This information could help you improve the credit score. There are several things you can do in order to increase your credit score.
128 points
Your credit score can be improved by paying more than the minimum on your credit card and by reducing your total debt on all credit cards. To avoid exceeding your credit limit, you should set it yourself. Lenders look for evidence that you have managed your credit well over a long time. About 128 points are worth your credit history. It shows when your first accounts were opened and when you made the last payment.
A credit score of 128 and below will not allow you to obtain a loan, credit card or mortgage. But there are ways you can improve your credit score. Although it can take several years to get your credit score up to a high standard, it is possible.
Age
The age of your credit history is one of the most significant factors influencing your score. In general, the older the accounts you have, the higher your score will be. Your score can be affected by closing credit accounts. Luckily, there are ways to minimize the impact of closing a credit account.
The average number of years in which you have been a credit card holder is used to calculate the age of your credit record. For example, if you have three credit cards, the average age is three years. Your credit age would be seven if you have more than five credit cards.
For a hard inquiry
You can manage your credit score by being diligent and monitoring it frequently. Many banks provide free tools for checking credit scores and your credit reports. Experian, for example, offers free access to your FICO(r) Score. Regular monitoring of your credit report will reduce the impact of difficult inquiries.
Lenders will require a copy to verify your credit history when you apply for loans. This is called a "hard inquiry" and it will affect your credit score. These inquiries will not be included in your credit score for one year. They will also disappear from your credit history after two years.
Average account age
It is important to look at the average age of all your credit accounts when you are looking at your credit history. A long credit history will improve your score while a short one will decrease it. Many factors influence the length of your credit history, including your age and demographics. Your credit score will increase if you keep your accounts current and open.
Having a long credit history will benefit you when applying for a loan or applying for 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.