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Regular Contributor
cowboyguy
Posts: 197
Registered: ‎07-26-2012

What's the impact of length of credit?

I'm new to this forum so please excuse if this question has already been asked..

 

I'm trying to understand what's the impact of each passing month on the FICO score.

 

So credit utilization remains the same, there's no hard inquiry & no new credit, what impact does each passing month has on the FICO score?

 

Has anyone ever tried to observe this?

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Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: What's the impact of length of credit?

[ Edited ]

FICO really doesn't award you for on-time payments or month-to-month aging. If you were to isolate out changes to util, changes to mix of credit, back out rebucketing, etc., and focus only on the month-to-month aging of yr old or older TLs then you probably will see it flatlined for months on end, maybe even years. The only changes you would see aside from the mentioned are for the positive impact it would make to AAoA over time and the positive impact you'd see as your oldest accounts age. You won't see a change every year, but definitely keep an eye on your AAoA as it hits another year and as your oldest overall, oldest revolving, oldest installment, etc., hit another year old or another half-year old. It's a YMMV-thing for everyone. If my oldest hits 20 years old I might see a gain. If your oldest hits 20, you might not. Depends on your credit and your scoring bucket.

Established Contributor
YahComb
Posts: 592
Registered: ‎03-10-2012

Re: What's the impact of length of credit?

each individual passing month is not that big of a deal as far as FICO is concerned. It's when you reach certain points, an account aging 6 months, 12 months, 24 months etc.

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Regular Contributor
cowboyguy
Posts: 197
Registered: ‎07-26-2012

Re: What's the impact of length of credit?

Sorry I didn't get it. So if I person keeps using credit card & PIF every month, there'll be no change to his/her credit score?

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Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: What's the impact of length of credit?


cowboyguy wrote:

Sorry I didn't get it. So if I person keeps using credit card & PIF every month, there'll be no change to his/her credit score?


Excluding all other scoring factors, you will not see a month-to-month gain by using a CC or paying on a loan. For example, DW has about 15 CCs and a mortgage. She went 6-7 months with the same exact FICO (mid-600s) with util being exactly the same. There are some on here who posted screen shots of 800+ FICO scores and they'd remain the same for a year or two years even while using their CCs and keeping util exactly the same.

Regular Contributor
cowboyguy
Posts: 197
Registered: ‎07-26-2012

Re: What's the impact of length of credit?

So how can FICO score be improved?
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Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: What's the impact of length of credit?


cowboyguy wrote:
So how can FICO score be improved?

Time.

 

Do you have anything holding your score back line new credit, lates or other baddies, balances on most of your accounts, utilization above 9%, etc.?

Regular Contributor
cowboyguy
Posts: 197
Registered: ‎07-26-2012

Re: What's the impact of length of credit?

No. I deliberately keep my utilization around 1%. No baddies nothing else.

 

I make my utilization zero but still my score doesn't pass 700. How can I bring my score more than 750? What should be my strategy?

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Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: What's the impact of length of credit?

I just saw your thread in CCs. The new history is holding you back. I bet if you let what you have age over the course of the next 2-3 years, you'll hit into the mid to high 700s. 

 

Another tip is to look at your FICO report. On the 2nd page it'll rank in order what hurts your FICO the most. The #1 slot is what holds your score back the most, followed by #2 and so on.


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