Credit Age

What Is Credit Age?
Credit age matters in terms of credit scoring purpose.  Credit score models such as FICO and VantageScore will check the age of your oldest and newest credits to come up with the average age of all your accounts, and determine how it will impact your credit score.
What Is The Importance Of Credit Age?
Lenders review your credit and its history to determine your capabilities on paying the loan on time. A longer credit age will show that you are more experienced in using your credit especially it’s years older than most, which means the lenders are more likely to know an individual’s level of risk when they decide to approve the loan.

What Is A Good Average Age Of Account (AAOA?)

A credit’s average age is the number of months the accounts have been open. It is divided by the number of accounts then rounded down to the next lowest whole number. AAOA includes all of an individual’s account regardless if they’re closed or active. 8 years is considered perfect. An increase is expected as soon as AAOA has reached 5 years and a top FICO score (850) can be attained within points between 6-7 years.

What Other Factors Help In Determining My Score?

• Individual’s history of payment
• Total of existing debt
• Credit card usage rate
• An individual’s mix of credit accounts
• Number of new credit applications

What Is The Difference Between Credit Age & Credit History?
A credit history determines your usage of your credit and it records the financial behavior and activities of an individual on using credit. Credit history affects your credit score more than a credit age. Credit age is basically how long you’ve had your accounts. That being said, this can still help in building good credit score but it’s not as significant as your payment history.
How Is Credit Age Broken Down?
FICO breaks down your age of credit history using these three factors:

• How long specific types of accounts have been open or active.
• How long the account has been open.
• How long you’ve been using these accounts.