Length of Credit History: Age Is Only Part of the Story
Having credit for years helps tell your story. But years of small accounts are not the same as a track record with a large car, boat or RV loan. I want to know what you have borrowed and how long you have managed it—not just when your first account opened.
A long credit history is useful. But “I've had credit for years” and “I've successfully handled a loan like this” are not the same statement.
What account age tells us
FICO considers the age of the oldest and newest accounts and the average age of accounts. A short history does not automatically mean a low score, and an old file does not guarantee a boat-loan approval.
Closing an account does not instantly remove its history from the report. Closing a credit card can reduce available revolving credit, however, which may affect utilization. Consider the account's costs and your circumstances rather than following a blanket rule to keep everything open or close everything paid off.
What borrowing experience tells us
The lender also wants to understand what you have repaid, how much you borrowed and how you handled the payments. Years of small credit-card accounts do not automatically establish comparable experience for a large recreational loan. A mortgage has its own characteristics and is not necessarily a substitute for declining-asset borrowing.
Start with an accurate picture
Tell us what your credit history actually contains. There is no universal seven- or ten-year waiting period that answers every application. The useful question is whether the history supports the request under the programs we can consider.
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Sources and further reading
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Educational information, not a loan offer or guarantee of approval. Requirements depend on the lender and transaction.