Whether you’ve had credit for six months or 20 years can make a big difference in your credit score.
A long track record without any major slip-ups suggests that your credit behavior will be similar in the future — and lenders and credit card issuers like that.
VantageScore combines two factors — how long you’ve been using credit and what types of credit you have — into a single factor and considers it “highly influential.” FICO scores break it out a little differently, with the length of your credit history accounting for 15% of the score and the mix of accounts making up 10%.
Length of credit history vs. credit age
The “length of credit history” means how long any given account has been reported open, says Rod Griffin, director of public education for Experian, one of the three major credit bureaus.
“Generally, the longer an account has been open and active, the better it is for the credit score,” Griffin says. “That’s particularly true for an account with a positive payment history that has no delinquency.”
The credit scoring algorithms calculate the average of how long all your accounts have been open. That average age of accounts is your “credit age.”
It’s all but impossible to get a score higher than 800 if you’re young, because your credit age likely will be less than that of a person who has had credit for years.
» MORE: Check your average age of accounts by getting a free credit report
Credit age matters, but less than other factors
While credit age matters for credit scoring purposes, you can’t do a lot about it other than keeping your accounts in good standing.
Being an authorized user on an old, established account in which the primary cardholder has excellent credit may help your score a little, but the passage of time during which you build or maintain good credit helps the most.
Keep the length of credit history in perspective: It’s only one element influencing your credit score, and not the most important one at that.
The biggest effects on your credit score come from:
- Payment history — making sure that you pay on time, every time.
- Credit utilization — making sure that you use no more than 30% of your available credit.
If you use credit regularly and lightly, and pay your bills on time every month, you’re doing the two essential things to have a good score. Sit tight and the average age of accounts will take care of itself.
Credit score simulator
What happens if…
I pay off this much debt:Get your score!
Your new score:
Bev O’Shea is a staff writer at NerdWallet, a personal finance website. Email: firstname.lastname@example.org. Twitter: @BeverlyOShea.