How Old Credit Cards Can Erode Your Credit Score

Today’s tip is pretty simple, follow it and you’ll be fine.  However this little financial mistake could cost you and your credit score if you’re not careful.

What Age Has To Do With Your Credit Cards

Age has a lot to do with your credit score.   It’s just one of the vital parts they use to calculate the score itself.  So what does it have to do with you?

Good question.

The age of you credit cards is very important.  The credit bureaus calculate it by taking the ages of all your accounts and averaging them all together.  Let do an example to illustrate the point.  Let’s say you have five credit cards all started at various different times.

  • Card 1# is 15 years old
  • Card 2# is 10 years old
  • Card 3# is 5 years old
  • card 4# is 3 years old
  • Card 5# is 1 year old

Together, the average age of you credit cards is almost 7 years.  Not bad, but let’s say you stopped using your 3 oldest cards and decided to cancel them.

What is your average age then?  Your average would have dropped from 7 years to 2 years.  Thus, negatively affecting your credit score.

How To Avoid This Mistake

To avoid this hazardous mistake look at canceling your newer credit cards first.  These cards won’t affect average age as quickly however this may be tough to do if the newer card is offering you some big rewards.

If that’s the case cancel the next most recent card. Also, don’t cancel more than one card at a time. Wait at least three to six months before you decide to cancel the next one.

If you follow these tips you’ll have fewer hiccups with your credit and be able to keep an older credit average.


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