Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and heres how we make money.
Whether you’ve had credit for six months or 20 years can make a difference in your credit score.
Lenders and credit card issuers like it when you have a long credit history free of major errors because it indicates that your credit behavior will remain consistent going forward.
Credit scoring company VantageScore combines two things in its 3. How long you’ve had credit and what kinds of credit you have are combined into a single factor by the 0 scoring model, which views it as “highly influential.” The FICO credit score is determined by a few different factors, including the length of your credit history, which accounts for 15% of your score in 2015, and the mix of accounts that make up 10% of your total credit score in 2010.
Your credit history has a significant influence on your financial situation; it can affect your ability to obtain credit cards, loans, and even rental housing. An important factor in evaluating your credit history is its duration, which contributes to 15% of your FICO%C2%AE%20Score and is a major factor in assessing your creditworthiness.
What is Credit History?
Your credit history is a detailed record of your borrowing and repayment behavior. It includes information on your credit accounts payment history, balances and inquiries. The length of your credit history refers to the duration of time you’ve been using credit responsibly, measured by factors such as:
- Average age of accounts: This is the average age of all the accounts on your credit report.
- Age of newest account: This is the date you opened your most recent credit account.
- Age of oldest account: This is the date you opened your first credit account.
- Time since last account activity: This measures how long it’s been since you last used a particular credit account.
How Length of Credit History Impacts Your Credit Score
Credit scoring models consider the length of your credit history as an indicator of your financial responsibility A longer credit history generally translates to a higher credit score, as it demonstrates your ability to manage credit over a sustained period.
According to FICO, a good credit history length is a longer one. Lenders view individuals with longer credit histories as less risky, as they have more data to assess their creditworthiness.
What is Considered a Good Length of Credit History?
While there’s no definitive answer to what constitutes a “good” length of credit history, studies have shown that individuals with FICO Scores ranging from 800-850 have an average credit history length of 99-128 months (around 8-11 years). However, achieving a good credit score, defined as a FICO Credit Score of 670-739, can be achievable in a shorter timeframe.
How to Increase the Length of Your Credit History
Building a long credit history takes time and consistent effort. Here are some strategies to help you extend your credit history:
- Establish positive credit accounts and wait: Open and use credit accounts responsibly, making timely payments and keeping your credit utilization low. As your accounts age, your credit history length will naturally increase.
- Consider the authorized user strategy: Ask a trusted friend or family member to add you as an authorized user on their credit card account, preferably one with a long history of responsible use. This can boost your credit history length and potentially improve your credit score.
Mistakes to Avoid
Certain actions can negatively impact your credit history length and potentially lower your credit score. These include:
- Opening too many accounts in a short period: This can lower your average age of credit history and reset the clock on your youngest accounts.
- Closing credit card accounts: While closing an account won’t directly shorten your credit history, it can increase your credit utilization ratio, potentially harming your credit score.
How Closing a Credit Card Affects Your Length of Credit History
Despite what many people think, your credit history doesn’t instantly get shorter when you close a credit card account. The closed account will continue to add to your average credit age for up to ten years after it closes on your credit report. It’s crucial to remember, though, that closed accounts have less of an effect on your credit score than open accounts.
Moving Forward
Understanding how the length of your credit history affects your credit score is crucial for building and maintaining good credit. By monitoring your credit reports regularly, managing your credit accounts responsibly, and avoiding detrimental actions you can steadily build a long and positive credit history that paves the way for a brighter financial future.
Length of credit history vs. credit age
According to Rod Griffin, senior director of public education at Experian, one of the three major credit bureaus, the “length of credit history” refers to the duration of time that a specific account has been reported open.
According to Griffin, “an account’s credit score is generally improved the longer it has been open and active.” “That’s particularly true for an account with a positive payment history that has no delinquency. ”.
The credit scoring algorithms calculate the average of how long all your accounts have been open. That average age of accounts is your “credit age. ”.
If you’re young, it’s nearly hard to get a score higher than 800 because your credit age will probably be low.
How the Length of Credit History Affects Your Credit Score
What is your length of credit history?
Your length of credit history makes up 15% of your credit score and includes the age of your oldest credit account, your newest account and the average age of all your credit accounts.
How long is a good credit history?
A good length of credit history is at least 7 years, though you’ll receive the best grade from WalletHub’s proprietary WalletScore® model if you have a 9+ year average. Maintain Old Accounts: Keep your older credit accounts open and active, as they contribute positively to your credit history’s length.
How long does a good credit score last?
In a FICO Score “High Achievers” study, people with a FICO Score ranging from 800-850 had an average length of credit history of 99-128 months (around 8-11 years). A good credit score, defined as a FICO Credit Score of 670-739, may be achievable in a far shorter time frame.
How much does a long credit history affect a credit score?
Many details influence your overall credit score. The length of your credit history is minor compared to factors like payment history or credit utilization, but still accounts for 15% of your FICO credit score and 20% of your VantageScore. What is a good length of credit history?