The length of your credit history represents the total duration that your credit accounts have been established and active. This metric is a significant factor in credit scoring models like FICO and VantageScore, making up approximately 15% of your overall credit score.
Credit history length includes several key components:
- Age of oldest account: The longer you’ve had a credit account open, the better it generally is for your credit score. It demonstrates a lengthy track record of financial responsibility.
- Age of newest account: The date you opened your most recent credit account. Opening many new accounts in a short period can lower your average account age, which might negatively impact your score.
- Average age of all accounts: This average reflects the mean age of all credit accounts you have, including credit cards, mortgages, car loans, and other types.
A longer credit history gives lenders more data to evaluate your credit habits and reliability over time, which can translate into better loan terms and interest rates. Conversely, a short credit history does not necessarily indicate poor credit but may lead to a lower credit score due to limited data.
Managing your length of credit history involves some strategies:
- Keep old accounts open: Closing old credit cards or loans can reduce your average account age and potentially lower your score.
- Limit new accounts: Avoid opening multiple new credit lines within a short period.
- Be patient: Building a long credit history takes time. Responsible use over years boosts your credit profile.
Understanding and managing your length of credit history is essential for maintaining or improving your credit profile. For more about how credit scores work, you might find our article on Credit Score informative.
For official guidelines on credit scoring, visit the FICO official site.