Relationship Advice: Credit Age & Your Credit Score

Have you ever opened or closed a loan expecting the new debt or the payoff to boost your credit, only to see your score initially drop? It has everything to do with your credit age and how it affects your credit score. Read on to understand more about how credit age impacts your score.
 
What is credit age?
Credit age is calculated by taking the length of time your credit accounts have been open and dividing it by the total number of accounts. The older the age of your credit, the better.
 
Why does it matter?
A portion of your credit score is based on your credit age. A higher credit age shows financial maturity. Based on the calculation above, by adding or removing a loan, your credit age will be affected and likely will go down depending on the age of your other existing loans.
 
How can I build my credit age?
Having revolving loans (like credit cards) and fixed loans (like vehicle loans) in your mix helps with credit age and shows payment history. A revolving loan (a loan with no term length) continues to age over time, allowing your credit age to continue to increase. Keep your oldest credit accounts open to boost your credit age.
 
What can help boost my score?
Taking on new debt or paying off existing debt is a good thing and will eventually benefit your credit score. To avoid big swings, try not to make too many changes all at once. After adding a loan to your credit, try not to close an existing loan for a bit, and vice versa.
 
When growing your credit age, patience is key. Our personal financial associates are happy to discuss ways to improve your credit score. Members can also access their credit scores for free anytime in Online Banking and the Mobile App. Try the new score simulator to see how your score might change if you pay off a credit card or close your oldest account.