One component of your credit score is your credit history. The longer history of consistently paying bills on time that you can show lenders, the better off you are. Let’s answer some questions you might have about credit history and how it impacts your credit score.
What Does Length of Credit History Mean?
Length of credit history refers to how long the accounts on your credit reports — from the credit bureaus Equifax, TransUnion, and Experian — have been open.
How is Credit History Calculated?
There are a few factors used to calculate your credit history:
- How long specific accounts have been open
- The average age of all of your accounts, how long your newest account has been open, and how long your oldest account has been open
- How long it has been since you used the open accounts on your report
How Does the Length of Credit History Impact My Credit Score?
The older your credit history, the better it is for your score. Length of credit history is worth 15 percent of a FICO Score and 20 percent of a VantageScore score.
Should I Leave Old Credit Cards Open or Close Them?
In general, it’s a good idea to leave credit cards open as long as possible. Yes, even the ones you don’t use. That’s because closing an account can lower your total available credit, which can hurt your score. If the card you no longer use has an annual fee, you might want to go ahead and cancel it. Your score will rebound rather quickly. Otherwise, keep your account open to boost your credit score.
Want to see what credit changes could impact your score? Use Credit Sense in the BOS Mobile Banking App or Online Banking platform to access the Credit Score Simulator. Fill in the information for credit incidents (like a new card, new loan, or a large payoff) and the simulator will show you your possible new score. This can be helpful when making credit decisions!