How the Length of Your Credit History Affects Your Score

The length of time you have had a credit file affects your credit score, which is derived from these five factors:

    • Your payment history 35%
    • The amount of money you owe 30%
    • The length of your credit history 15% (discussed on this page)
    • New debt and credit inquiries 10%
    • Your credit mix 10%

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The length of your credit history

Simply put, how long you have managed your personal debt including credit cards, mortgages, and other loans, is important to lenders. Generally speaking, the longer you have had a credit file with accounts you've been making payments on, the better.

For reasons that should be obvious, having an extensive history of responsibly managing debt is a good sign to lenders that you will continue to do so in the future. In fact, up to 15% of your score is determined based on the length of your credit history, and related factors.

To make things more interesting, Fair Isaac (the creators of the FICO Score) go deeper in their analysis of your credit history when generating a score, by looking at how long you have had specific accounts.

This factor is closely related to new debt, which is a separate factor on its own, however, accounts that are not new, but have not been opened a long time in relation to other items in your report, and in relation to the overall length of your credit history, can affect your FICO score.

Got all that?

Sidebar
If you are new to the game, don't despair. While managing debt for a long time will definitely improve your FICO score, having a very short credit history won't necessarily hurt it.

With a short credit history, other factors are given more importance. Check your own score to see where you stand.

Finally, lenders also want to know how long it has been since you've last used certain sources of credit. This may be counter-intuitive, but lenders want you to use your various accounts (if you have more than one) at least occasionally. If you have a dormant account with a credit card from college, or an equity line of credit that you never use, it might be a good idea to either use it every once in a while, or close it.


Next: Your "new" debt and credit inquiries