You should consider the age and history of each account when determining your credit history. In an example, let's say you have three credit cards: Card One is three years old, Card Two is five years old, and Card Three is one year old. Your credit history age in this example is three years.
15 points
Credit score can be affected greatly by how long your credit history has been. When determining your credit score, credit scoring models consider how old your oldest account. To find out how old your oldest account is, check out your credit report. This information can help you improve your credit score. There are several things you can do in order to increase your credit score.
128 points
You can improve your credit score by paying more than the minimum payment on your credit cards and by reducing your total balance on all your credit cards. To prevent going over your credit limit, it is important to set your own credit limit. Lenders will be looking for evidence of credit management that has been consistent over time. Your credit history counts for approximately 128 points. It shows when your first accounts were opened and when you made the last payment.
Although you are not eligible for a loan or creditcard if you have a credit score below 128, there are still ways to improve your credit score. Although it can take several years to get your credit score up to a high standard, it is possible.
Age
The age of your credit history is one of the most significant factors influencing your score. Your score will generally be higher if you have more accounts than you have. In addition, closing a credit account can damage your score. There are ways you can reduce the impact of closing your credit account.
Your credit history's age is the average number years you have held the same type accounts. If you have three credit card accounts, your average age would be three years. If you have five credit cards or more, your credit age will be seven years.
Hard inquiry
Being diligent and keeping track of your credit score are the best ways to manage it. Many banks offer tools that allow you to check your credit report and credit score for free. Experian is one example. It offers free access your FICO(r). Score. Hard inquiries can be minimized by regularly monitoring your credit report.
When you apply for a loan, lenders will ask for a copy of your credit report. This is called a hard inquiry and will reduce your credit score by a few percentage points. These inquiries will cease to be included in credit scores after one year. 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. Longer credit histories will improve your credit score. A shorter history will lower it. You age, demographics, and many other factors can impact how long your credit history lasts. 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. If they do not help you to reach your goals, you should be cautious about opening any new accounts.