The length of your credit history accounts for 15% of your FICO score, making it a key factor in improving your creditworthiness. But what exactly is required to land an excellent credit score?
In the previously recorded Facebook Live video below, Motley Fool analysts Nathan Hamilton and Michael Douglass answer a user-submitted question about the average account age needed get an excellent credit score.
Michael Douglass: Tabitha asks, "What is a good average age for your accounts?" Of course, it changes that average when you get a new card.
Nathan Hamilton: Yep. The minimum to get the best scores is going to be five years. To get your score above 800, or in excellent territory, 750-plus, you have to have five years plus as the average age of your accounts. In my scenario, I don't know what my average account age is, but I was able to get around that score. But, generally, you're going to have to do that to get the best score.
Douglass: Yeah. And of course, that is, if you're looking for perfect or near-perfect, most folks will benefit if they're able to simply get it to better than where it is. That's often a credit utilization issue, that's often, have you paid all your bills on time. Remember that collections stay on your report for seven years, so you want to make sure that you're taking care of that stuff first. Then, unfortunately, after that, it's kind of a waiting game, because older age of accounts.
Hamilton: Before you go to the next question, something relevant to add on to that is -- what was her name?
Hamilton: If you're listening now, Tabitha, if you look at it, your average account age, if you do have credit cards that aren't incurring an annual fee, say, you're not using them, they've been dormant, there's no harm in keeping those accounts open. I would suggest doing so. If you want to place a purchase on it every once in awhile, just to keep some activity, sure, go ahead. But there's no reason to close down those accounts if they're dormant, not incurring fees, and it can help establish a better average account age.