When determining how long your credit history is, consider the age of each account. In an example, let's say you have three credit cards: Card One is three years old, Card Two is five years old, and Card Three is one year old. Your credit history is therefore three years old.
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. Check out your credit reports to determine how old your oldest bank account is. 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
You can improve your credit score by paying more than the minimum payment on your credit cards and by reducing your total balance on all your credit cards. To prevent going over your credit limit, it is important to set your own credit limit. Lenders will be looking for evidence of credit management that has been consistent over time. A credit history's length is worth approximately 128 points. It shows when each of your accounts was opened and when the last payment was made.
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. It can take several years before your credit score reaches a high level but it is possible.
Age
The age of your credit history is one of the most significant factors influencing your score. Your score will increase if you have more than one credit account. Closing a credit card account can also damage your score. 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. 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
One of the best ways to manage your credit score is to be diligent and monitor it regularly. Many banks offer tools that allow you to check your credit report and credit score for free. Experian, for example, offers free access to your FICO(r) Score. 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 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 vanish from your credit history after 2 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. Longer credit histories will improve your credit score. A shorter history will lower it. Your credit history can be affected by many factors, such as your age and demographics. Keep your credit accounts current and open to increase your credit history.
When applying for loans or credit cards, having a good credit history can be a big advantage. The average age of your credit history will decrease if you open new credit accounts. Do not open new credit accounts unless you have a clear goal.