When determining how long your credit history is, consider the age of each account. 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 a lot by the length of credit history. 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 help improve your credit score. You can improve your credit score by doing a few things.
128 points
By paying more than your minimum credit card payment and reducing your total credit card debt, you can improve your credit score. To avoid going over your credit limit you should also establish it. Lenders will be looking for evidence of credit management that has been consistent over time. About 128 points are worth your credit history. It shows when you first opened your accounts and when you last made a payment on each one.
If your credit score is below 128, you won't be able to get a loan or credit card. However, there are many ways to improve it. 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. In general, the older the accounts you have, the higher your score will be. Your score can be affected by closing credit accounts. There are ways to reduce the negative impact of closing credit accounts.
The average number of years in which you have been a credit card holder is used to calculate the age of your credit record. If you have three credit card accounts, your average age would be three years. If you have five cards or more, your credit history would be seven.
An in-depth inquiry
Being diligent and keeping track of your credit score are the best ways to manage it. There are many banks that offer free tools for checking your credit score and credit report. Experian offers access to your FICO(r), Score for free. You can minimize the impact of hard inquiries by monitoring your credit reports regularly.
When you apply for a loan, lenders will ask for a copy of your credit report. This is known as a difficult inquiry, and it can lower your credit score a little. After one year, these inquiries will no longer be added to your credit score. They will also vanish from your credit history after 2 years.
Average age of account
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. Many factors influence the length of your credit history, including your age and demographics. Keeping your credit accounts open and current can increase your average age of credit history.
Long credit histories are a plus when applying for a loan, or for a card. 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.