What Is a Good Length of Credit History?

When it comes to building a solid credit score, the length of your credit history matters more than many people realize. This component of your credit history might not be the first detail that comes to mind when you think about how to earn good credit. Yet length of credit history plays a key role in the calculation of your credit score.

Whether you’re applying for a credit card, a mortgage, an auto loan, or some other type of financing, your credit age can influence both your approval odds and the terms lenders offer you. On a positive note, you don’t need decades of credit experience to build a strong credit profile. But understanding how this part of your credit score works can help you make wiser choices, both now and in the future.

This article will help you understand what counts as a good length of credit history and explain the impact length of credit history has on your credit score. You’ll also learn practical tips for how to increase your age of credit over time. Here’s what you need to know about this important credit score category.

What is length of credit history?

Your credit reports are full of information that credit scoring models, like FICO and VantageScore, can use to assess your creditworthiness. Length of credit history, or the age of the accounts that appear on your credit reports, is one category of information that impacts your credit score.

Length of credit history makes up 15% of your FICO® Score.^[1] And, along with credit mix, length of credit history is responsible for 20% of your VantageScore® 4.0 credit score.^[2] (Note: FICO Scores are the choice of 90% of top lenders.^[3] So, when you apply for a loan, there’s a good chance a lender will review your FICO Score during the application process.)

This credit score category is essentially a snapshot of how long you’ve been managing credit. When a credit scoring model looks at your length of credit history, it considers factors like:

• The average age of all accounts on your credit report
• The age of the oldest account on your credit report
• The age of the newest account on your credit report
• How long ago you opened individual credit accounts
• How long it’s been since you used the accounts on your credit report^[4]

To explain the concept more simply, lenders and credit scoring models like to see that you have a track record of managing accounts responsibly over time. Remember, the job of a credit score is to predict how likely you are to make a severe late payment (90 days late or worse) in the next 24 months.^[5] If your credit report shows a long credit history—especially with well-managed, on-time payments—your credit score should benefit from that information.

How length of credit history impacts your credit score

As mentioned, length of credit history impacts 15% of your FICO Score. While this might seem like a smaller slice of your credit score pie, length of credit history can still make a meaningful difference in your overall credit health—especially if you’re new to the credit-building process.

If you’ve had credit accounts open for a long time (and have consistently managed them responsibly), that history could work in your favor. On the other hand, if you’re just beginning your credit-building journey or if you’ve recently opened new credit accounts, your score might take a hit in the length of credit history category.

Here are a few examples of ways credit age might help or hurt your credit score.

• The older your credit history, the better. Credit scoring models typically reward consumers with older accounts on their credit reports. According to FICO data, people with a perfect 850 credit score have a well-established credit history with the average age of their oldest account coming in at 30 years old.^[6] Yet even with a much younger credit history, you can work to earn good credit with responsible management habits.
• Opening new credit can lower your average age of accounts. If your average age of credit drops because you open new accounts, you might see a temporary credit score decline. People with younger or thinner credit profiles may be more vulnerable to credit damage here. Still, if you’re just starting the credit-building process, you may need to consider opening multiple accounts in the beginning.^[7]
• Closing older accounts could hurt your length of credit history (eventually). Be careful about closing old credit cards and other older accounts on your credit report. When you close an account, it will eventually age off your credit report (typically after around 10 years for positive, closed accounts).^[8] Once that happens, it will no longer count in age of credit calculations. Plus, closing a credit card might increase your credit utilization ratio which could hurt your credit score in other ways.

You don’t have to be afraid to open new accounts when you need or want access to additional financing. But it is important to be thoughtful about the loan and credit card applications you submit. After all, taking out a new loan or credit card not only impacts your budget, but it also affects your long-term credit health.

How to increase the length of your credit history

If you’re building credit for the first time or you have a thin credit file, don’t worry. Everyone has to start somewhere. Establishing length of credit history does take some time, but here are a few ways you may be able to support your score while your accounts age.

1. Establish the right credit accounts

It’s important to establish positive credit accounts so you have the opportunity to build length of credit history in the first place. And the sooner you can start building credit, the better. If you’re able to establish credit while you’re still in college or just entering the workforce, it could give you a head start on the credit-building process.

Of course, getting approved for your first credit accounts can sometimes be tricky. Some lenders may be hesitant to approve credit newcomers as they work to build a credit foundation. Yet the following beginner-friendly accounts are often a better place to start.

• Secured credit cards: You typically secure credit cards with a security deposit of your personal money. The deposit serves as collateral for the issuing bank and reduces the risk involved in approving you for a new account. As a result, secured credit cards tend to be easier to qualify for, even if you have no credit or a thin credit file.
• Student credit cards: Student credit cards are designed to help college students build credit history and good credit management skills. These cards tend to feature easier qualification requirements and some may even feature basic rewards or cash back benefits.^[9]
• Credit builder loans: With credit builder loans you do not get your loan funds upfront. Rather you make fixed payments to the lender over a designated time period. Then at the end of the loan term you receive access to your loan proceeds (minus interest and fees).

Of course with any account, it’s critical to manage it responsibly with on-time payments. If you make late payments that appear on your credit report, that negative payment history could quickly outweigh the benefit of a longer credit history from a credit scoring point of view.

2. Become an authorized user

One strategy that might help you build credit faster in the length of credit history category is becoming an authorized user on a friend or family member’s credit card. If someone you know has a credit card—especially an older account—asking them to add you as an authorized user might have a positive impact on your length of credit history when (and if) the card issuer adds the account to your credit report.

However, keep the following in mind when it comes to the authorized user strategy. If you become an authorized user on a credit card, the payment history for that account may show up on your credit report along with the credit utilization ratio (aka the account balance to credit limit relationship). So, if the primary account holder makes late payments or over uses their credit card limit, being an authorized user could possibly hurt your credit score instead of helping it.^[10]

If you’re a parent who wants to help a child establish credit, making your son or daughter an authorized user on your credit card might also be worth considering. While it’s important to review the pros and cons of adding a child as an authorized user on your credit card, this strategy does have the potential to help build length of credit history with responsible use.

3. Use credit cards periodically

Even if you don’t use a credit card for everyday purchases, consider using the account every few months to keep the card active. If you don’t use your credit card, some card issuers might eventually close the account due to inactivity.

When a credit card cancellation happens, it could eventually hurt your length of credit history after the account ages off your credit report. The closure of a credit card might also increase your credit utilization ratio which can be bad for your credit score in a different way.

Factors that could reduce your length of credit history

Several actions, whether intentional or otherwise, have the potential to shorten your length of credit history and possibly lower your credit score. Here are a few potential mistakes to watch out for in this credit scoring category.

1. Closing old accounts

Unless you have a good reason—like closing joint credit cards during a divorce—it’s often best to keep older accounts for as long as possible. Even in cases where you don’t want to pay an annual fee anymore, consider calling your credit card issuer and asking for a downgrade instead. This approach could let you keep your account open while avoiding unnecessary fees.

Again, closed accounts usually stay on your credit report for seven to 10 years. But once they fall off, they no longer contribute to any credit age calculations.

2. Opening too many new accounts at once

Each new account you open lowers your average age of credit. If you apply for several credit cards or loans in a short period of time, your credit score might drop as a result.

Over time, your credit score may rebound in this area as the accounts you open grow older. But if you continue to apply for new accounts over and over again, you could risk experiencing consistent credit score issues in this area.

3. Not using older accounts

Even if you keep a credit card open, a lack of activity could hurt your length of credit history in a few ways. First, credit scoring models consider how long it’s been since you last used the accounts on your credit reports and a lack of activity could work against you here.^[4] Also, if you fail to use a credit card for an extended period of time, your credit card issuer might decide to reduce your credit limit or even close your account altogether.

If your credit card company closes your credit card, the account may eventually fall off your credit report. When that happens, your length of credit history could be reduced and your credit score might drop in response.

Final thoughts: Building credit takes time

When it comes to building healthy credit, slow and steady wins the race. Unfortunately, it takes time to establish a longer credit history. But even if you’re at the beginning of your credit-building journey, you can take steps now to help set yourself up for a successful future.

Establish positive credit accounts as early as possible and manage them responsibly. And do your best to keep your oldest accounts in good standing whenever possible. Over time, the length of your credit history will naturally increase—and hopefully your credit score will lift as well.

Remember, the smart financial decisions you make today can help open doors for future opportunities. Whether you’re applying for a mortgage, financing a car, or trying to qualify for lower interest rates, a longer and stronger credit history has the potential to work in your favor.

Sources

1. myFICO.com. “What Is the Length of Your Credit History?” https://www.myfico.com/credit-education/credit-scores/length-of-credit-history
2. VantageScore.com. “VantageScore 4.0: Ushering in a new standard for credit scoring.” https://cdn.vantagescore.com/uploads/dlm_uploads/2023/09/VantageScore-4.0-Fact-Sheet-Aug-2023.pdf
3. myFICO.com. “90% of top lenders use FICO® Scores.” https://www.myfico.com/credit-education/fico-scores-bridge
4. myFICO.com. “What’s In My FICO® Scores?” https://www.myfico.com/credit-education/whats-in-your-credit-score#:~:text=Length%20of%20credit%20history%20(15%25),-In%20general%2C%20having&text=Your%20FICO%20Scores%20take%20into,age%20of%20all%20your%20accounts
5. Experian.com. “Credit Score Basics: Everything You Need to Know.” https://www.experian.com/blogs/ask-experian/credit-education/score-basics/understanding-credit-scores/
6. FICO.com. “The Perfect Credit Score: Understanding the 850 FICO Score.” https://www.fico.com/blogs/perfect-credit-score-understanding-850-fico-score
7. Experian.com. “How ‘Short Account History’ Affects Your FICO Score.” https://www.experian.com/blogs/ask-experian/how-short-account-history-affects-fico-score/
8. Experian.com. “When Are Closed Accounts Deleted?” https://www.experian.com/blogs/ask-experian/when-are-closed-accounts-deleted/
9. Equifax.com. “Student Credit Cards: What Are They & How to Get One.” https://www.equifax.com/personal/education/credit-cards/articles/-/learn/student-credit-cards-what-are-they-how-to-get-one/
10. Experian.com. “Will Being an Authorized User Help My Credit?” https://www.experian.com/blogs/ask-experian/will-being-an-authorized-user-help-my-credit/

About the author

Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. She is the founder of CreditWriter.com, an online credit education resource and community that helps busy moms learn how to build good credit and a strong financial plan that they can leverage to their advantage. Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many other outlets. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).

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