Some of the key components of the credit score are based upon on length of credit, how currently you pay your bills, how much of your credit card credit limits you use, inquiries, and other minor measurements. Age is not really a factor in your credit score, but it’s never that easy.
Length of credit
An older age can help your credit score because of the “length of credit history” category, which represents 15 percent of the points in your score. If you have older credit reports because you just happen to be older than, say, someone on their 20s, then you’re earning more points in that category.
Types of credit used
More experienced credit users may also have a more significant variety of “types of credit used” which represents 10 percent of your score points. This equates to having a combination of credit cards, retail cards, mortgage loan, and vehicles loans. Someone who is older would have more of a chance to have a combination of these items than someone that is just starting out.
On the other hand, young people who have had credit for at least two years can still have high credit scores.
Age does not directly equate to a high credit score. An older person usually has had credit for a longer period of time compared to someone new to the credit environment. But, that does not automatically guarantee that they’ll have good credit. An older person can have problems paying bills and owing too much, just as anyone else. Any age can have a good credit score by paying your bills on time, in full and keeping your balances low.
Point being, don’t get discouraged simply because you don’t have a longer experience using credit. It’s only 15% of your score points, which means it’s a minor category. Focus on paying bills on time and staying out of debt and then the age of your credit report becomes immaterial.
Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, founder of www.creditexpertwitness.com and a Contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. You can follow John on Twitter here.