How Length of Credit History Impacts Your Credit Score

Conceptually not complicated, but here I will offer a HUGE credit hack to help make your credit score excellent!

free credit report

This is the second article in a series on the components of credit scores and how to hack them!

Check out the first one on credit utilization here!

This is comprised of an average of the age of all open credit accounts.

To learn about other factors that impact your credit score (and how to hack them), check out this article on hard credit inquiries!

“This is why it is so important to keep old credit cards open (if they don’t have an annual fee)”

— RCG, right now

The biggest battle I see here is when it comes to cards with annual fees. The cons can outweigh the pros here when it comes to keeping these open if you are not using them anymore. Credit scores are important, but they should not come at a monetary loss in my opinion.

I did say I have a hack here, are you ready?

Do you have parents that are older than you? Do they have credit cards? This trick works best with kids in their late teens/early twenties but you can actually sign them on as authorized users on your credit card(s) and they will inherit (for lack of a better word) your credit history!

If you have bad credit, please don’t do this and start your kid(s) off in a bad place. If, however, you have strong credit this can be HUGE!

If your son, we can call him Billy, is 18 years old and you sign him as an authorized user on your credit card that you opened ten years ago, Billy now has a credit score and a history of ten years! You don’t even have to give Billy the card! In most cases, a parent with a kid around this age may just let their child hang on to the card for emergencies or errands. Need some eggs from the store? Send Billy and tell him to use the credit card!

This hack, if used properly, can set your kids up with a very strong score right out the gate. The length of credit history will change as Billy opens up his own credit card one day, but the oldest account will absolutely help.

This goes both ways, though. If you sign Billy onto your card and you miss a payment, his score will suffer. Be careful with this trick, but remember how powerful it can be!

Are you in your twenties and struggling to build credit? Flip the switch! Have a conversation with your parents about getting signed on to one of their cards. Again, you don’t even have to use the card to take on the score history.

check my credit score

Growing and developing a credit score in your late teens / early twenties is no easy task. This move, if used properly, can make it SIGNIFICANTLY easier to develop a strong score quickly.

As with all habits, the earlier you can solidify them, the stronger they will be. Teaching your children about credit at a young age can make a massive difference in their financial success later in life. Getting started early is one of the best things you can do for them. This credit score factor is an excellent example of that – your score is enhanced if you have a long standing credit history!

As always, thank you very much for taking the time to read this. Look forward to more articles on Credit, and never hesitate to reach out if you have any questions!

My contact information can be found here.