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Short credit history. Anything I can do about it?

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Anonymous
Not applicable

Short credit history. Anything I can do about it?

According to my credit report, one of the negative factors is my short credit history. My oldest account is 7yo, and the average age 3 years. Is there anything I can do to improve it other than waiting for several years?

 

Would it help to add me to my mother-in-law's good credit card with long history?

 

I also had an older account with LensCrafters which I paid off timely, but they closed it due to inactivity. Would it help to reopen it? 

 

I have 3 installment accounts, but I don't have any revolving credit other than Macy's store card with $1500 limit. I was thinking to apply for a new credit card to develop good credit use history, but it will shorten the average length of credit.

 

Any advice?  

Message 1 of 5
4 REPLIES 4
smallfry
Senior Contributor

Re: Short credit history. Anything I can do about it?

Don't apply for anything.
Message 2 of 5
Jazzzy
Valued Contributor

Re: Short credit history. Anything I can do about it?

Hi Tortoiseshell and welcome to the forums.

 

Being added as an authorized user (AU) on someone else's credit card can help your average age and history. If your average age is 3 years, the card has to be older than that in order to help your average age. The older the better. If it is older than any of your tradelines (open or closed), then it will also give you a longer history.

 

Does she carry a balance? It's best to be on a card that isn't used much, or it might impact your utilization percentage (that is how much credit is used as compared to your total credit limits). In other words, if it's a card with a $5k credit limit, but she owes $4,800 on it, that could hurt you. And, of course, it needs to be a card with a perfect payment history. My oldest open tradelines right now are my husband's Discover and Sears...26 and 24 years old. I do have closed ones older than that, but when the closed ones drop off, I will have the benefit of these AU cards.

 

Your LensCrafters account is still counted into your history and average age of accounts...whether it is open or closed. If you reopen it, it would stay on your reports for a longer time. Accounts stay on your reports and count for up to 10 years after they are closed. Don't, however, open an account that you don't need or would have to spend money to keep open. Don't let your FICO score cost you money.

 

You are right that applying for a new card will only lower your average age. At some point, however, you will want another trade line. It might work to get the AU card first. Let that add to your age, and then open a new account. Opening new accounts does set you back a bit, but then those new accounts grow older and help your age on down the line. One step back...two forward, so to speak.

Message 3 of 5
Anonymous
Not applicable

Re: Short credit history. Anything I can do about it?

Hi Tortoiseshell!

 

The one thing that you can always count on to improve, month-by-month & year-by-year is your AAoA. Well, unless you're actively opening up a lot of accounts resulting in the lowering of your AAoA. Being added as an AU on a card that is older than your oldest account (hopefully, lots older), with clean history & low to no utilization would increase your AAoA. The question is, would it increase it enough to get you to out of the "short credit history" bucket?

 

If your Lenscrafter account is still on your credit report, even closed, it is still factored into your AAoA, and reopening it won't increase your age. If it's off your reports, I can pretty much promise you that they're not going to just reopen it, you'd be applying for a new account & that would lower your age.

 

Opening new accounts will lower your AAoA. This is where you think about what your goals are, and how they're best achieved. It sounds like you don't have a major bank card. If you need one, and open one, it will lower your AAoA. However, you'll likely see a net gain for adding a major bank card where you previously didn't have one. You may also see your score rise faster, with good payment history, and low utilization, than it does today. However, if (for example) you're looking for a score increase ahead of a mortgage app, I'd hold off on adding any new credit at all-- I'd look to increase my scores in other ways, if an increase was needed.

Message 4 of 5
Anonymous
Not applicable

Re: Short credit history. Anything I can do about it?

I should have known, by the time I hit "post" that somebody else would have beat me to it! Smiley Very Happy
Message 5 of 5
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