Having a long credit history is important for building a strong credit score. But how many years of credit history do you really need to have excellent credit? There are a few factors to consider when determining what constitutes a sufficient credit history length.
What Length of Credit History Do Lenders Like To See?
Most lenders and credit scoring models look for applicants to have at least 3-5 years of established credit history. Having 5+ years of credit history shows lenders that you have experience managing credit accounts responsibly over time.
According to credit bureau Experian, the average length of credit history for someone with “very good” credit is 14 years. For “exceptional” credit scores, the average is 25 years of credit history. So while 3-5 years may be enough to get approved, longer histories in the 10+ year range are preferred.
How Credit History Length Impacts Your Credit Score
The length of your credit history accounts for about 15% of your overall FICO credit score. FICO and other credit scoring models specifically consider:
- How long your oldest credit account has been open
- The average age of all your accounts
- How long specific credit types (like credit cards and loans) have been on your reports
Having a longer history tends to benefit your credit score, while having a short history with few longstanding accounts can negatively impact your score. Specific credit history guidelines from FICO include:
| Credit History Length | Impact on FICO Score |
|---|---|
| 3+ years | Little impact |
| 5+ years | Positive impact |
| 10+ years | Significant positive impact |
| Shorter than 3 years | Potential negative impact |
As you can see, credit history matters when it comes to calculating credit scores. But age alone doesn’t tell the whole story…
Credit History Mix Also Matters
In addition to the length of your credit history, credit scoring models also consider the mix of accounts on your reports. Lenders like to see a healthy mix of different account types over time.
For example, having one credit card for 10 years reflects a longer history than having five credit cards open for only 2 years each. Even though the combined history may be 10 years in both cases, having experience managing just one revolving credit account is seen as riskier by scoring models.
Ideally, your credit history would include:
- At least one revolving credit account (credit card)
- At least one installment loan (mortgage, student loan, car loan, etc.)
- Consistent long-term use of credit (no gaps in account usage)
This mix demonstrates you can successfully manage different types of credit accounts over many years.
Too Many New Accounts Can Hurt
One other important factor – having many new accounts opened in a short period can actually lower your scores. This is because it may indicate taking on significant new credit obligations in a short timeframe.
As a rule of thumb, avoid opening more than 2-3 new credit accounts within a 12 month period to limit the impact on your credit history profile.
How to Build Credit History When You’re Just Starting Out
For those just beginning to establish credit, starting early and responsibly managing accounts over time is key. Here are some tips for building credit history from scratch:
- Open your first credit card within the first 6-12 months of turning 18 and use it moderately.
- After 12-24 months, open a second credit card and installment loan (like a student, auto, or personal loan).
- Keep accounts open and active – do not close your oldest accounts.
- Apply for credit limit increases periodically to show larger credit access.
- Maintain low balances relative to credit limits each month.
- Pay all bills on time every month – don’t miss payments.
Following these steps starting early on can help establish a strong base of credit history over time.
Maintaining Credit History
Once established, maintaining a solid length of credit history involves:
- Keeping existing accounts open and active
- Using credit periodically and paying balances off in full
- Applying for increases to credit limits
- Opening new accounts only as needed
- Paying all bills on time every month
Proactively managing accounts allows you to preserve your long credit history while also demonstrating responsible usage over time.
Re-Establishing Credit History After Issues
Sometimes past credit difficulties like bankruptcy or late payments can shorten your credit history profile. If you need to rebuild your history after setbacks, focus on:
- Continuing to use any active accounts you still have open responsibly
- Opening new secured credit cards or secured loans
- Becoming an authorized user on a spouse or family member’s longstanding account
- Limiting new credit applications while your history recovers
- Maintaining perfect payment records moving forward
With time, responsible account management can help rebuild your history length even after experiencing past credit challenges.
Conclusion
Most lenders like to see at least 3-5 years of credit history for approval. But the longer your history, the better – with 10+ years considered excellent. Your history length, mix of accounts, and responsible use over time are key to building a strong credit profile.
Maintaining longstanding accounts, managing credit wisely, and allowing time for your history to age will ensure your history supports access to credit when you need it.