Jonathan Machado
Length of credit history accounts for about fifteen percent of a FICO score and a similar share of VantageScore. The component is built from three things: the age of your oldest account, the age of your newest account, and the average age across all accounts. None of those metrics can be improved quickly - you cannot age accounts on demand - which is why decisions you make in your twenties about which accounts to keep open matter decades later. The most expensive single mistake people make in this area is closing old credit cards.
How FICO Calculates Account Age
The oldest account on your report sets a ceiling for your file's age. If your earliest account opened fifteen years ago and is still active, your oldest account age is fifteen years. If you close that account, it will continue to count for the next ten years (closed accounts in good standing remain on the report for ten years), but after that decade it falls off entirely - and your file's age can suddenly drop by ten or fifteen years overnight. This is why the standard advice is to keep old cards open even if you do not use them.
Average age is exactly what it sounds like: the sum of all account ages divided by the number of accounts. Opening a new account drags the average down, especially on a thin file. If you have three accounts averaging eight years old and you open a new card, the average drops to six years instantly. On a file with fifteen accounts, the same new account barely moves the average. This is why mortgage lenders sometimes advise borrowers not to open any new credit in the six months before applying for a home loan - the average-age drag can shave a few points off the score at exactly the wrong moment.
Why Closing Old Cards Hurts Three Ways
Closing an old credit card hurts your score in three connected ways. First, it removes the available credit limit from your utilization calculation. If your total credit limit was twenty thousand dollars across four cards and you close one with a five thousand dollar limit, your total limit drops to fifteen thousand. The same monthly balance now represents a higher utilization ratio, and utilization is the largest scoring factor for most people.
Second, although closed accounts in good standing report for ten years, they stop aging once closed. The card you opened twenty years ago and then closed five years ago is reporting as a fifteen-year account that will fall off in five more years. After it falls off, your account length history shortens significantly. Third, closing a card reduces your account mix and total count - smaller factors but real ones, especially on thinner files.
The right move with an old card you no longer want to use is usually to keep it open, use it once every six to twelve months on a small recurring charge (a streaming subscription paid off immediately), and let it sit. The annual fee is the only reason to close it, and even then, ask the issuer if they will downgrade you to a no-fee version of the same product, which preserves the account history.
What Counts as an Old Account
The accounts that count are those reporting to the bureaus: credit cards, retail store cards, mortgages, auto loans, student loans, personal loans, and sometimes business cards if they report to your personal file. Utility accounts, cell phone plans, and rent do not count under traditional FICO scoring (though some newer models include them). The first credit card you ever opened is almost always your oldest reporting account, which is why credit experts cling so hard to those first student or starter cards.
An authorized user account can also extend your file's age. If you were added to a parent's card that they opened thirty years ago, that account may report on your file with the full thirty-year age (issuer policies vary - some report the full age, others report only from the date you were added). This is why authorized user status is such a powerful tool for young adults and people with thin files. The account's age, payment history, and credit limit all flow through, though the score formula typically discounts authorized user accounts somewhat compared to your own.
Building Length of History Patiently
You cannot fast-forward account age, so the strategy is mostly defensive and patient. Open one or two starter cards early, do not close them, do not change them, and let them age. If you must close an account (because of a forced product change, an issuer leaving the market, or fraud), prioritize closing newer accounts and keeping your oldest one open. If you have an annual-fee card that no longer makes sense, ask the issuer for a product change to a no-fee card on the same account number rather than closing - this preserves the open date and account history.
One small tactical note: when applying for credit, the issuer's underwriting may consider your file's age separately from the score itself. Mortgage and auto lenders often look at the age of the oldest account directly in their decision process. A thin file with a twenty-year-old card is treated very differently from a thick file where the oldest account is two years old, even if the FICO scores are similar. Patience compounds in this area more than almost any other in personal finance - the first card you opened at age twenty-two will be one of the most valuable items on your report when you are forty.
Parents of teenagers can use this principle deliberately. Adding a sixteen-year-old as an authorized user on a parent's well-established card can give them a credit file with significant age by the time they reach their early twenties, dramatically accelerating their access to good rates on student loans, first apartments, and early auto loans. The same applies to spouses entering a marriage where one partner has a thin file - being added as an authorized user on the partner's older accounts can quickly thicken and age the thinner file. These are not loopholes; they are legitimate uses of the way the system actually scores history.
