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How Your FICO Credit Score Is Calculated: Length Of Credit History

Monday, July 11, 2011 - 12:05 PM
This is the third of a five-part series examining what goes in to creating your FICO credit score -- the three-digit number that helps determine how much you can borrow and on what terms. Each part of the series will take an in-depth look at one of the five basic components of the credit scoring model. Today: length of credit history. 

In the world of the FICO credit score, age and experience trump youth and enthusiasm.

To earn a FICO credit score, borrowers need to have at least some credit history. Although it's not the most heavily weighted factor used to calculate a borrower's FICO score, the length of a borrower's  credit history does matter. And within that component, age and experience typically proves beneficial.

"Generally, the older your length of credit history, the better it is for your FICO score," says Barry Paperno, consumer operations manager for  

Credit scores are used by lenders -- including credit card issuers and mortgage lenders -- to predict the risk of a borrower not repaying their loans. There are many credit scores available, but it's the FICO score that gets the most frequent use by lenders. As a result, to improve their ability to qualify for low interest credit, borrowers will want to improve their FICO scores.

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WhataBummerWhataBummer413 posts since
Oct 15, 2010
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