Length of Credit History: 15% of your Credit Score

Length of Credit History is my least favorite credit score factor. Maybe this is because this is a factor you can do the least about. That’s because it’s a measurement of time. But, I’m oversimplifying this a bit. Length of credit history looks at the length of time EACH of your credit accounts has been open. What this means is the longer you’ve had an account, the better your credit score is.

So, let’s say you’ve got a two credit cards, they have the same limits, the same balances, etc. The one difference is you’ve had one for 1 year and one for 10 years. Which one is helping your score more? The older account. Risk models love data, and more history means more data. More good history means less risk.

Parents: Your length of credit history is set, but you can help your kids. Get them started early with a secured credit card. You can do the authorized user card approach, but I think the secured card builds better habits.

This is why a model FICO score user has over 18 years on their oldest account. Time is your asset, if you start early. But start early and smart… please

Post from: Video Credit Score

Length of Credit History: 15% of your Credit Score – Episode #83