What Is a Good Age of Credit & How to Build It?

Credit scores are compiled from various data points reflecting financial behavior. The length of one’s credit history, often called “age of credit,” indicates how long an individual has managed credit accounts. This factor plays a significant role in assessing creditworthiness, providing insight into a borrower’s long-term habits and reliability for lenders.

Understanding Credit Age

Age of credit refers to the time passed since your credit accounts were first opened. Credit reporting agencies track the opening dates of all credit lines, including credit cards, auto loans, mortgages, and personal loans. This information is used by credit scoring models to calculate your credit age, providing a historical perspective on habits.

Credit scoring models typically consider the average age of all open credit accounts. For instance, if you have one account open for 10 years and another for 2 years, your average age would be 6 years. Models also factor in the age of your oldest account, demonstrating long relationships, and the age of your newest account, assessing recent credit activity.

Even after an account is closed, it can continue to appear on your credit report and contribute to your credit age for a period. Positive accounts, like a paid-off and closed credit card, might remain on your report for up to 10 years from the date of closure. This continued reporting helps preserve the length of your credit history, supporting your overall credit profile.

A longer credit history is generally viewed favorably by lenders. It demonstrates a sustained track record of responsible borrowing and repayment, showing ability to manage financial obligations over time. This significantly reduces perceived risk for creditors and influences your overall credit score, which lenders use to determine eligibility for new credit and the terms offered.

What Defines a Good Credit Age

There is no single, universally defined “good” age of credit, as its impact is assessed within your entire credit profile. However, general benchmarks exist. An average age of credit of seven years or more is often considered excellent, reflecting a substantial history of credit management.

An average credit age between five and seven years is typically seen as good, indicating a solid foundation of credit experience. An average age ranging from two to five years may place a score in the fair category, suggesting a developing but limited history. An average age below two years generally signifies a very short credit record, placing an individual in the poor category.

Credit age is just one of several factors determining your credit score. Payment history, amount of debt owed, credit mix, and new credit applications also contribute significantly. An individual with a shorter credit history can still achieve a good score if other factors, such as consistent on-time payments and low credit utilization, are managed well.

For younger individuals or those new to credit, establishing a long credit history takes time. A “good” credit age for them will be relatively shorter than for someone who has managed credit for decades. New credit users should focus on responsible management from the outset, as this lays the groundwork for a strong future credit age.

Strategies for a Healthy Credit Age

Maintaining older credit accounts helps preserve a healthy credit age. Closing an old credit card, even with a zero balance, can reduce the average age of your accounts and shorten your overall credit history. Keeping these accounts open, especially those with long histories and positive payment records, helps anchor your credit age and demonstrate financial stability.

Exercise caution when applying for new credit accounts. Opening multiple new accounts within a short period can significantly lower the average age of your accounts, as these new accounts have a very short history. Each new application typically results in a hard inquiry on your credit report, which can temporarily reduce your score for a few months. A balanced approach is advisable.

Becoming an authorized user on an established credit account can sometimes contribute positively to your credit age, though its impact varies. If the primary account holder has a long history of responsible payments and the account is reported to credit bureaus for authorized users, this older account’s history might appear on your credit report. The exact impact varies among scoring models and depends on the primary user’s credit behavior.

Building a robust credit age requires consistent and responsible credit management over time. The most effective way to enhance this factor is through diligent, long-term use of credit. Regularly paying bills on time, keeping credit utilization low, and maintaining a diverse but manageable mix of credit accounts will lead to a strong and favorable credit history over years.