If you've been paying attention to your credit score and how it's calculated, you may have noticed that one of the smaller facets of your credit score is your length of credit history. Often overlooked, this is one of the most misunderstood aspects of credit scoring. Today, we're going to spotlight this a bit and explore what it means.
To do that, let's take a look at a recent question I received from one of my readers.
Hi John,
You talk a lot about how you close old credit cards that you no longer use. Doesn't that reduce your average age of accounts and therefore damage your credit score?
Credit Karma seems to indicate that the average age of accounts is an important part of my credit score.
Michael
Great question. To address this issue, let's begin with a quick overview of how your average age of accounts (AAoA) affects your credit score. If you're interested in learning more about the ways by which overall credit scores are calculated and how you can keep a healthy credit score, check out my Ultimate Guide to Understanding Your Credit. For today, though, I'm going to focus solely on your Length of Credit History.
Average Age of Accounts is one of the factors that contribute to your overall Length of Credit History, which itself accounts for 15% of your total FICO credit score.
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