credit age

Example

“Closing the oldest credit card hurt his credit age and dropped his score by 25 points.”

Memory Tip

AGE matters — older accounts signal stability. Never close your oldest card.

Why It Matters

Credit age is a significant factor in determining your credit score, accounting for about 15 percent of most credit scoring models. Lenders use this information to assess your experience managing credit responsibly over time, which influences the interest rates and terms they offer you. A longer credit history demonstrates stability and reliability, making you a more attractive borrower for mortgages, car loans, and other major financial products.

Common Misconception

Many people believe that closing old credit accounts will improve their credit score, when in fact closing accounts can harm your credit age and increase your credit utilization ratio. The length of your oldest account matters significantly, so keeping old accounts open and active is generally better for your credit profile. Canceling credit cards you have held for years can actually lower your average account age and hurt your creditworthiness.

In Practice

Suppose you opened a credit card at age 25 and kept it active for 20 years until age 45, while also opening two new cards at age 40 and 43. Your oldest account would be 20 years old, but your average credit age would be approximately 13 years, calculated by adding all three account ages and dividing by three. If you closed the oldest card at age 45, your average age would drop to about 4 years, potentially lowering your credit score by 50 to 100 points depending on other factors.

Etymology

Modern credit scoring term — the age of your credit history matters.

Common Misspellings

Related Terms

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