Average Account Age
CreditGlossary term
Definition
The mean length of time all your credit accounts have been open, calculated by adding the ages of all accounts and dividing by the number of accounts. A longer average account age generally helps your credit score because it demonstrates a longer track record of managing credit. Opening several new accounts in a short period can lower this average and temporarily reduce your score.
Related terms
- FICO ScoreA credit score developed by the Fair Isaac Corporation, ranging from 300 to 850, that lenders use to evaluate your creditworthiness. It is calculated based on five factors: payment history, amounts owed, length of credit history, new credit, and credit mix. A higher FICO Score generally means better loan terms and lower interest rates.
- Credit MixThe variety of credit account types you have, such as credit cards, auto loans, mortgages, and student loans. Having a diverse credit mix can positively influence your credit score because it shows lenders you can manage different types of debt responsibly. However, credit mix is a relatively small factor in your overall score, so you should never take on debt just to diversify it.
- Hard InquiryA credit check that occurs when a lender reviews your credit report as part of a lending decision, such as when you apply for a credit card or loan. Hard inquiries can lower your credit score by a few points and remain on your credit report for two years. Multiple hard inquiries in a short period for the same type of loan, like a mortgage, are typically grouped together and counted as one.
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