The age of each credit card is a key factor in determining the length of your credit history. Consider the following example: Let's say that you have three credit card accounts. Card One is three-years old, Card Two has five years and Card Three is one. In this instance, your credit history is three years.
15 points
Your credit score can be affected by the length of your credit history. Credit scoring models include the age of your oldest account when calculating your score. To find out how old your oldest account is, check out your credit report. This information could help you improve the credit score. The average credit score is 711, but there are a few things you can do to improve your score even further.
128 points
Credit score can be improved by making more than the minimum payments on your credit cards, and by decreasing your total credit card balance. You should also set your own credit limit to avoid going over it. Lenders will be looking for evidence of credit management that has been consistent over time. The length of credit history is worth around 128 points. It shows the date you opened each account and the last time you made a payment.
You can't get a loan nor a credit card if your credit score is less than 128. However, there are some ways to increase your credit score. It can take several years before your credit score reaches a high level but it is possible.
Age
Your credit score is affected by the age of your credit history. Your score will rise if your credit history is older. Closing a credit card account can also damage your score. You can minimize the damage caused by closing your credit card account.
The average age of your credit history is the number of years you have had the same type account. For example, three credit cards equals three years. If you have five or more cards, your credit score would be seven.
An in-depth inquiry
One of the best ways to manage your credit score is to be diligent and monitor it regularly. There are many banks that offer free tools for checking your credit score and credit report. Experian for instance offers free access and reporting to your FICO(r). Regular monitoring of your credit report will reduce the impact of difficult inquiries.
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 will reduce your credit score by a few percentage points. After one year, however, these inquiries are no longer included in your credit score. They will also disappear from your credit history after two years.
Average age of account
You should consider the average age for your accounts when looking at your credit record. A long history will increase your credit score, while a short history will decrease it. There are many factors that determine how long your credit history is, including your age and demographics. Your credit score will increase if you keep your accounts current and open.
Long credit histories are a plus when applying for a loan, or for a card. You will have a lower average age if you open credit accounts. Do not open new credit accounts unless you have a clear goal.