Length of History

The Length of History on your open and active accounts affects 15% of your FICO Score. Basically, the older an open and active account is, the more points that specific account will be worth towards your credit score. On the other hand, new accounts can reduce your credit score because of their lack of history. In fact, if you were to go out and buy a new car, open a credit card or even refinance an existing loan, you will see your credit score drop when that new account shows up on your credit report. That is why your banker might advise you to avoid opening accounts while refinancing your mortgage. Did you know that the average person has at least one account that is 12 year old or older? People with 760+ credit score have at least one account that has been open and active for 19 years on average. Since the FICO score system only gives you points based on your open and active accounts, your credit score is basically as old as your oldest account. A better way to explain it is this: if your oldest open and active account is only 6 months old, your FICO score is only taking into consideration 6 months worth of credit history. It doesn't matter if you are 50 years old. If your oldest open and active account is only 6 months old, then your credit scores will reflect that.