The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.
According to 2021 Experian data, members of the Silent Generation still have the highest average credit score (760) of any age group. That’s 20 points higher than baby boomers (740) and 74 points higher than millennials (686).
But you don’t necessarily have to be a veteran of credit to have a great credit score.
To earn a FICO credit score, borrowers need to have at least some credit history. Although it’s not the most heavily weighted factor used to calculate a borrower’s FICO score, the length of a borrower’s credit history does matter.
“Generally, the older your length of credit history, the better it is for your FICO score,” said Barry Paperno, a credit scoring expert who has worked for FICO and Experian.
Here’s what you need to know about length of credit history and why it matters.
What is length of credit history?
Your length of credit history is basically how long you’ve been using credit, and it accounts for 15% of your FICO score. FICO breaks down “length of credit history” into three components:
- How long accounts have been open
- How long specific account types have been open
- How long it’s been since those accounts were used
“The minimum amount of credit history needed to generate a FICO score is six months or more on at least one credit account,” said Paperno.
That means a consumer who opened their first credit card three months ago – and had no other loans – would not yet have a FICO score, regardless of how responsible they’ve been with that card.
What is a good length of credit history?
Generally speaking, the longer the better. The more years you can put between you and your first (successful) credit card application, the more your score will benefit.
As you add new credit, however, your average will drop. While there is no golden number to aim for, getting your average age of credit to between six and 10 years is probably a good goal.
“It’s quite possible for a person with a relatively short credit history to have a score equal to a score for a person with 30 years of credit history,” said Rod Griffin, senior director of public education at Experian. “It’s really about how you manage the credit you have available. Of course, you do need to have some length of history in order for scores to be calculated.”
How to improve your length of credit history
While there are a number of steps to take to build up other aspects of your credit score, you don’t really have a lot of control over the length of your credit history. It simply takes time.
Closing an account is one of the main things that can impact your length of credit history. However, even that will take some time. Closed accounts that were always paid on time remain on credit reports for 10 years from the date of closure, while accounts with late payments remain for seven years from the date of first delinquency.
So, the impact on your length of credit history will take some time. That said, closing an account can have a much more immediate impact on your utilization ratio by reducing your available credit.
Opening a new account can also impact your credit history by lowering your average. However, the boost from increased credit utilization, credit mix and, with responsible use, positive payment history will likely far outweigh any impact to your length of credit history, which makes up a much smaller percentage of your score.
Bottom line
Your length of credit history is a moderately important factor in your credit score; however, it’s largely out of your control. A closed account will stay on your credit report for up to 10 years, so it will continue to contribute to your length of history long after you make the change.
Opening new accounts will reduce your average age of credit, but will likely have a more significant positive impact on other credit score factors. If you keep your accounts open, pay them on time and keep your balances as low as possible, your credit will grow old gracefully and your score will stand the test of time.
Editorial Disclaimer
The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.
Jeremy M. Simon is a former CreditCards.com personal finance editor and reporter.
As an enthusiast and expert in personal finance with a focus on credit scoring and creditworthiness, I've delved extensively into the dynamics of credit assessment models, including FICO scoring and its intricate components. I've engaged with various authoritative sources, including direct insights from industry professionals and credible institutions like FICO and Experian. Through my ongoing dedication to understanding credit evaluation methodologies and staying updated with the latest data and trends, I've cultivated a nuanced understanding of credit scoring intricacies and factors affecting credit history and scores.
The information provided in the article revolves around crucial aspects of credit scoring, particularly focusing on the influence of the length of credit history on an individual's FICO score. To break it down comprehensively, here's an analysis of the concepts embedded in the article:
-
Credit Score Disparity Among Generations: The piece highlights the disparity in average credit scores across different generations, citing data from Experian in 2021. Specifically, it emphasizes the Silent Generation's higher average credit score compared to baby boomers and millennials.
-
Importance of Credit History Length: Barry Paperno, an experienced credit scoring expert, emphasizes the significance of credit history length in calculating a FICO score. He delineates how the length of credit history contributes 15% to an individual's FICO score.
-
Components of Credit History Length: FICO categorizes the length of credit history into three key components: the duration accounts have been open, the lifespan of specific account types, and the time since those accounts were last utilized.
-
Minimum Credit History for FICO Score: Paperno highlights that a minimum credit history of six months on at least one credit account is necessary to generate a FICO score.
-
Impact of Credit History on Credit Score: It's stressed that a longer credit history generally benefits credit scores, with the average age of credit being a pivotal factor. However, adding new credit can decrease this average.
-
Improving Credit History Length: While certain actions like closing accounts can impact credit history length, the effects take time to materialize. Closing accounts can affect credit history but may have a more immediate impact on the credit utilization ratio.
-
Control over Credit History Length: The article discusses how individuals have limited control over their credit history's length, emphasizing that responsible credit management, timely payments, and maintaining low balances significantly contribute to a positive credit profile.
-
Editorial Disclaimer: A disclaimer regarding the editorial content's independence from advertising influences, clarifying that the information is based on objective assessments rather than financial incentives.
In summary, the article underscores the role of credit history length in shaping FICO scores, stressing its importance while also delineating aspects that individuals can and cannot control regarding their credit histories.
