04/09/2024
Understanding the Age of Your Credit Accounts and Its Impact on Your Credit Score
Just like a vintage wine, the age of your credit accounts can get better with time! Here’s a look at John’s credit history for a clearer example:
- Mortgage: 15 years
- Auto Loan: 8 years
- Credit Card: 12 years
- Student Loan: 4 years
- Line of Credit: 6 years
Calculating the Average Age:
Total years (15+8+12+4+6) = 45 years
Number of accounts = 5
Average Age of Credit Accounts = 9 years
The average age of your credit accounts is a testament to your long-term financial reliability.
Be mindful when opening new accounts as they can reduce your average age of credit, potentially lowering your credit score temporarily.
Always weigh the impact on your credit score against the benefits of a new credit line.
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