Length of Credit History

Length of credit history is the category a FICO Score uses to measure how long the accounts on a credit report have existed. The name and the weight are both Fair Isaac's own: its list of the five categories a FICO Score reads gives "length of credit history (15%)," and it has a consumer education page devoted to the factor.

The distinction from credit history is worth drawing, because the two names are almost identical and the objects are not. Credit history is the underlying record of how a person has borrowed and repaid, which a credit report documents. Length of credit history is one of five categories a particular family of models computes from that report, and it measures account ages rather than the amount of borrowing the record contains. The consequence is that the two can diverge in both directions: someone can have a long credit history that is thin, holding one account for twenty years, and a short one that is dense.

As with every published scoring weight, the 15 percent describes a typical file rather than a coefficient. Fair Isaac publishes the caveat itself: "Even the levels of importance shown in the FICO Scores chart above are for the general population and may be different for different credit profiles." It adds a point specifically about this factor, that "scores for people who have not been using credit long will be calculated differently than those with a longer credit history," which is a substantive statement rather than boilerplate.

The three components, and one of them is routinely dropped. Fair Isaac's "What's in my FICO Scores?" page says the scores take into account: "How long your credit accounts have been established, including the age of your oldest account, the age of your newest account and an average age of all your accounts"; "How long specific credit accounts have been established"; and "How long it has been since you used certain accounts."

That third component is the interesting one, because it means the factor is not purely about elapsed time. An old account that has sat unused for years is not identical, for this factor, to an old account in regular use. Fair Isaac's own dedicated page on the factor lists only the first two components and omits recency of use entirely, so the fuller description above is the one to work from.

The same two pages also state the underlying claim at two different strengths, and only one of them is safe to repeat as fact. The five-category page hedges: "In general, having a longer credit history is positive for your FICO Scores, but is not required for a good credit score." The dedicated page says: "A longer credit history will always have a positive effect on FICO Scores." Those are not the same claim, and the hedged version is the one consistent with everything else Fair Isaac publishes about population variation. Its own dedicated page in fact supplies the counterexample in the next sentence: "Even some people who haven't had credit for a considerable length of time can still have a high FICO Score if the rest of their credit report looks good."

The factor's defining property is that time is its only input, which cuts both ways. Nothing improves it except waiting, so it is the one category where effort has no purchase. But equally, nothing damages it except opening accounts, and it improves automatically for anyone who simply keeps accounts open and pays them.

The catch-22, in Fair Isaac's words, and the three routes it offers. Its dedicated page names the problem: "The big catch-22 of growing your FICO Score is that you need credit to get credit, and it's difficult to open lines of credit to build your FICO Score if you don't have a good FICO Score." It then suggests three things.

First, a secured credit card, a card backed by a cash deposit, with the observation that matters for this factor: "FICO Scores look at secured cards the same as any credit card." So the account age accumulating on a secured card is the same asset as age on any other card.

Second, a co-applicant or an authorized user arrangement: seeing whether a friend or family member with good credit will be a co-applicant, or is willing to add you as an authorized user on their card. Fair Isaac describes this as "a lot to ask," which is fair, and the two arrangements carry very different liability, which belongs with the pages on those subjects.

Third, time combined with ordinary use: "Use your card, but keep the balances low and pay on time."

This is not a universal scoring category. VantageScore 4.0 does not treat length of credit history as a factor of its own. Its User Guide lists a single factor called "Age and Type of Credit," described as "length of credit history and types of credit," which merges this category with what Fair Isaac calls credit mix. So advice framed around "the five factors" is advice about one model family, and the comparison between the two structures belongs with credit mix, since the merged factor is named for both halves.

The closing-a-card claim is weaker than its popularity suggests. It is widely said that closing a card shortens your credit history, and the two Fair Isaac pages devoted to this factor say nothing at all about closed accounts. What Fair Isaac does say sits on its page about improving a score, and it points the other way: "Note that closing an account doesn't make it disappear. A closed account will still appear on your credit report and may be considered when calculating your credit score." The Consumer Financial Protection Bureau states the reporting half, that a positive payment history "may be reported after a loan is paid off, and even after the account is closed."

So the premise the claim rests on, that the account leaves the calculation, is not what the model's publisher describes. Fair Isaac names a different mechanism for the harm from closing a card, and it belongs to a different factor: "Closing credit lines may hurt your score by reducing your overall available credit and increasing your credit utilization ratio," which is why its own advice is "don't close unused credit cards as a short-term strategy to raise your scores." What cannot be established from any source Fair Isaac publishes is exactly how long a closed account keeps contributing to the age calculation, so this page states the mechanism it can source and leaves the duration alone.

The factor is computed from dates on the report, so it can be reproduced by hand.

1. Find the opening date of every account the report shows.

2. Note the oldest and the newest, which are read as separate components.

3. Average the ages across all accounts.

4. Note how recently each account was used, which is the third component.

A hypothetical example of the arithmetic, because it is the arithmetic that explains almost every piece of advice given about this factor. Rosa's report shows three accounts, opened 12 years, 4 years and 6 months ago. Converting to months makes the sum visible: 144, 48 and 6.

Oldest account. 144 months, or 12 years.

Newest account. 6 months.

Average age. (144 + 48 + 6) ÷ 3 = 198 ÷ 3 = 66 months, which is 5 years and 6 months.

Now open a fourth account today, with an age of 0 months. The oldest account is unchanged at 144 months. The newest account is now 0 months. And the average becomes (144 + 48 + 6 + 0) ÷ 4 = 198 ÷ 4 = 49.5 months, or about 4 years and 1.5 months.

So a single new account took 16.5 months off the average while touching neither the oldest account nor the total of the existing ages. That is the whole mechanism, and it explains two things at once: why opening several accounts in a short period affects this factor more than opening one, and why the effect shrinks as the number of existing accounts grows. On a file with twelve accounts rather than three, the same new account would have moved the average by a small fraction of that.

Pros

• It improves on its own. No strategy, product or payment behavior is required beyond keeping accounts open.
• Fair Isaac states that a long history is helpful but "is not required for a good credit score," so a thin file is not a bar to a high score.
• Secured cards count the same as any other card for this factor, which gives someone starting out a genuine route in.
• The arithmetic is transparent: anyone can compute their own average account age from the dates on their report.

Cons

• Time is the only input, so it is the one factor that cannot be improved deliberately in the short run.
• Every new account lowers the average age immediately, which is a real cost attached to any decision to open credit.
• The catch-22 is genuine: a thin file makes credit harder to obtain, and obtaining credit is the only way a file stops being thin.
• It is not a universal category. VantageScore 4.0 merges it with credit mix, so guidance built on the five FICO categories describes one model family.
• The published 15 percent describes the general population, and Fair Isaac notes that scores for people who have not been using credit long are calculated differently, so the weight on an individual thin file is unknown.