Breaking Down Credit Scores – Age of Credit
The 3rd part of the “How Credit Scores Work” series, Derick Vogel explains Age of Credit and its part in your total credit score.
As Derick explains in the video, age of credit, as part of your credit score, makes up about 15% of your total score, which comes out to 82.5 points. It is also probably the simplest of factors that make up your total score as it’s fairly straightforward. Basically, the “age of credit” factor is based on when your credit report starts – or, the age of your credit report.
For instance, if the first time you ever used credit – such as your first credit card – was in 2000, the age of your credit would be about 19 years, at the time of this article being posted. That seems simple enough, right? Well, it is, however, it is still important to understand how you could potentially influence the age of your credit.
How Your “Age of Credit” Could Change
A credit factor such as “age of credit” doesn’t seem like something that could ever change. It’s based simply off the oldest of your credit accounts. But let’s consider an example scenario that could change your “age of credit”.
Say, for example, your first credit account is a credit card that you opened in the year 2000. You used that credit card for a few years with some positive payments but also have a few late payments and, perhaps, you even default on the card. Years later you are working on repairing your credit and decide to try and dispute the record of that card – given that it has some late payments and that you defaulted on the card which are negative items on your credit report.
Let’s say that you were able to successfully dispute those negative items from your first card which, in turn, removed the record of that card from your credit report. Now, let’s also say that after you had that card you didn’t open another line of credit or get a new credit card until 2015. Once you’ve successfully disputed your first card, hoping to improve your credit by removing a negative item, your “age of credit” would now only go back to 2015 rather than 2000. This would take 15 years off the age of your credit.
Now, remember, “age of credit” is worth 82.5 points of your total score so, by removing that first credit card from your report you could drastically affect your score. Despite removing a negative item, you could end up reducing your score rather than improving it. That’s why it’s important to understand every aspect of your credit report rather than just trying to go in and dispute any and all negative items.
If you’re not sure how you should approach repairing your credit or have any questions, please give us a call today!