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7 • Length of Credit History
Counts toward your favour!

The Length of Credit History contributes 15% to your credit report calculation! The longer you have been on the credit industry radar is considered a consistent history so closing unused credit cards as a strategy to erase your past or raise your rating does not work in your favour.

FICO chart series

If you have been managing credit for only a short time, don't open a lot of new accounts too rapidly. New accounts will lower your average account age. This will have a larger effect on your credit rating if you don't have a lot of older credit information. And adding newer accounts is actually not in your best interests because rapid account buildup can look risky if you are a new credit user.

While the age of credit records can be beneficial by indicating major infractions as minor only blips in your long record the content (bankruptcies, collections, judgments or NSF cheques) can be heavily damaging.

Be aware that paying off an arrears account will not automatically remove it from your credit report. It will stay on your report for three years unless you ask the creditor to withdraw the report. Also note, that closing an account doesn't make it go away. A closed account will still show up on your credit report, and may be considered in your rating years after it is closed.

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