Why Is a Long Credit History Important?
Lenders value a long credit history because it provides more data to assess your reliability as a borrower. A lengthy and positive record demonstrates your experience managing debt and making timely payments, which reduces the perceived risk. This track record is a key predictor of your future financial behavior, showing that you understand how to use credit responsibly over time.
This factor is so significant that it makes up about 15% of a FICO Score, one of the most widely used credit scoring models. For lenders, a borrower with a decade of positive credit management is often seen as more predictable and lower-risk than a borrower with a perfect but short history of only six months.
How Is the Length of Credit History Calculated?
Credit scoring models don’t just look at when you opened your first account. They calculate your credit history length by analyzing three key metrics from your credit report:
- Age of your oldest account: This establishes the starting point of your credit history.
- Age of your newest account: Opening several new accounts in a short period can lower your average age and may signal risk to lenders.
- Average age of all accounts: The sum of the ages of all your accounts divided by the number of accounts.
For example, if we calculate as of January 2025:
| Account Type | Open Date | Age (Years) |
|---|---|---|
| Student Loan | January 2015 | 10 |
| Credit Card A | March 2017 | 8 |
| Auto Loan | July 2019 | 6 |
| Credit Card B | October 2023 | 1 |
| Oldest Account Age: | 10 years | |
| Newest Account Age: | 1 year | |
| Average Account Age: | 6.25 years ((10+8+6+1) ÷ 4) | |
How to Build and Maintain a Long Credit History
Building a long credit history requires time and strategic planning. Follow these tips to develop a strong credit foundation:
- Start Responsibly: The sooner you open and properly manage a credit account, the better. Options like a secured credit card, a credit-builder loan, or becoming an authorized user on a trusted person’s account can establish your history.
- Keep Old Accounts Open: Closing an old, unused credit card can harm your score. It erases the history associated with that account and reduces your average account age. Unless the card has a high annual fee, it’s usually best to keep it open.
- Be Strategic About New Credit: Avoid opening too many new accounts at once. Each new account lowers your average account age and results in a hard inquiry, which can temporarily dip your score.
Common Myths About Credit History Length
Understanding the facts can help you avoid common mistakes:
- Myth: Closing old credit cards is good financial “decluttering.”
Fact: This is one of the most common errors. Closing your oldest accounts can significantly shorten your credit history and lower your credit score. - Myth: Only credit cards count toward credit history.
Fact: Any account reported to credit bureaus contributes. This includes installment loans like mortgages, auto loans, and student loans, all of which add to the length of your history. - Myth: You must carry debt to build credit history.
Fact: You do not need to pay interest to build credit. Using a credit card for purchases and paying the statement balance in full each month is an excellent way to build a positive history without carrying debt.
Building a long and positive credit history is a marathon, not a sprint. With patience and responsible habits, you can create a financial record that supports your long-term goals.
