How the length of credit history affects your credit score?

1. v How the length of credit history affects your credit score?

2. v • Credit score is a significance of your creditworthiness. The credit report contains a record of your payment history, credit age, and other factors which eventually determines your credit score. • The length of credit history plays a meaty role. It accounts 15% of your credit score. • Whether you’ve had credit for 6 months or 10 years can make a big difference in your credit score. You’re a much better candidate for credit cards and loans when you’ve had a long and positive credit history.

3. The credit scoring model looks at youroldest and newest accounts to determine the average credit age. What Determines the Length of Credit History? The average age of all your accounts are also factored into the length of credit history. Several opened accounts can lower your average credit age and hurt your credit score.

4. How the Length of Credit History Affects Credit Score? Lenders review your credit history to determine how likely you are to repay your loan on time. A longer history shows you have more experience using credit and longer track record of repayment.  The longer your credit history, the more accurate lenders can be in determining the level of risk they take on when lending to you. Do not stress out if you are just joining the league as the essential elements of a credit score is not just the length, but to pay your dues on time.

5. How Do You Improve Your Credit History? You can check a free credit score on credit bureau websites such as that of CRIF High Mark. Well if you haven't checked yet, you can do that first. In case you have never applied for a credit card or a loan in your name, your most likely reaction after viewing your score would be why is my credit score -1 or NH or not available?”. Well don’t worry, it shows -1 or NH because you don’t have any credit history yet. This is your step 1 of building your credit score.

6.  Start Early

7. Pay Your Dues on Time • If your credit history indicates that you’ve missed payments or over utilized credit cards, a long credit history might not help. • On the other hand, if you have a long history of timely payments with a low credit utilization ratio, it shows that you are responsibly managing credit and are worth the risk for lenders.  • This means that when a lender performs a credit check, you could be more likely to be approved for credit cards and loans at a better interest rate.

8. Retain Older Credit Accounts • Credit age is all about how old your payment history dates back to, it’s worth considering old credit accounts with a decent track record before closing them. • The longer an account has been open and active, the better it is for the credit score. That’s particularly true for an account with positive payment history, without any delinquency.  Even when you close a credit card, it will stay on your credit report and continue to reflect for around 7 years.

9. Limit Loan Applications • Applying for multiple loans with multiple banks indicates credit hungry behavior. Also, each time you apply for a loan, the bank conducts a hard inquiry on your account. • It also does not help with your credit history length as the average age is reduced due to the opening of simultaneous accounts.

10. Check Your Credit Score Every Once in A While

11. You can get both your Personal Credit Score and Business Credit Score by applying directly on the link mentioned below: https://cir.crifhighmark.com Follow CRIF India on : /CRIF INDIA