December 5th, 2012
Credit Report Card Break-Down: Average Age of Open Credit Lines
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Last time, we talked about how your percentage of on-time payments affects your credit. Before that, it was all about your open credit card utilization and how a high percentage can really ding your score. Today, we’re discussing another factor in your Credit Report Card: your average age of open credit lines.
Your credit history says a lot about you as a borrower. Of course, there’s whether or not you’ve made payments on time, but there’s also just how long your history is. In Credit Karma’s Credit Report Card, we take a look at the average age of your open credit lines, since many scoring models weigh newer credit lines more heavily.
How does my credit history length affect my credit?
Your credit history length is a significant factor in your credit score. Based on that, the average age of your credit cards is a strong indicator of your credit history. Basically, the longer that you’ve responsibly managed credit (like credit cards), the higher your credit score. Lenders and creditors can get a more thorough and accurate evaluation of your creditworthiness by looking at years and years of your credit use.
This is reflected in the score comparison charts you’ll see in your Credit Report Card.
From this chart you can see that Credit Karma members with an average age of open credit lines at eight or more years also have an average credit score of 700, which is a good score. On the opposite end of the spectrum, members who have no credit history average out to a credit score of 554, which is in the poor range. In the middle, members averaging out to four to six years of history have a credit score of 679, which is good, but not great.
What can I do?
There’s no quick fix to make your credit history longer, but there are a few things you can keep in mind as you keep building your credit:
- When possible, keep old accounts open and in good standing. Unless your oldest credit card account is costing you money, keep it open and use it regularly. This will continue to lengthen the average age of your credit lines over time.
- Spread out credit card applications. You already know that you shouldn’t apply for a bunch of credit cards at once because of the hard inquiries the applications will initiate. But when you’re working on building your credit, it’s also important to spread out new applications because of the average age of your credit lines. As you’re adding new cards, leave at least a year of space between applications, especially if they’re your first few cards.
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