Consider the age of each account when determining how long you have had credit history. Let's assume you have three creditcards: Card one is three years old; Card two is five years old; and Card three is one year. In this case, your credit history age is three years.
15 points
Your credit score can be affected a lot by the length of credit history. When determining your credit score models, credit scoring models account for how old the oldest account is. Your credit report will reveal how old your oldest accounts are. This information will help you improve credit scores. Although the average credit score is 711 there are some things you can do that will help improve it.
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 are looking for evidence that your credit management has been good over a prolonged period. The length of your credit history is worth about 128 points. It shows when your first accounts were opened and when you made the last 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. The general rule of thumb is that the more credit accounts you have, generally, the higher your score. Additionally, closing a credit line can cause a drop in your score. There are ways you can reduce the impact of closing your credit 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 credit cards, your credit age would be seven years.
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 can be used to check your credit score and credit reports for free. Experian provides free access to your FICO (r) Score. It is important to monitor your credit reports on a regular basis in order to minimize the impact from hard inquiries.
Lenders may request a copy of credit reports when you apply to 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. After two years, they will disappear from credit history.
Average account age
The average age of your accounts should be considered when looking at credit history. A longer credit history will raise your credit score while a shorter history will make it worse. Your age and demographics are two of the many factors that influence how long your credit history will be. Keep your credit accounts current and open to increase your credit history.
Long credit histories are a plus when applying for a loan, or for a card. Opening new credit accounts will lower the average age of your history. You should be cautious about opening new accounts unless they will help you achieve your goals.