Some things get better with age. Vintage cars. A fine Bordeaux red. And, apparently, credit cards. If you’ve done any research into your credit score, you probably already know that older lines of credit are better than newer ones. So, anytime you’re doing credit card comparison, think twice about replacing that older card with a new one.
Don’t get us wrong, there are times when it makes sense to transfer your balance or to start using cards which offer you a better annual percentage rate. But when it comes to building your credit, there’s more that you have to consider for credit card comparison.
The elusive perfect score
Perfect credit scores are rare, with only about one million people having them in the entire country. We know, a million sounds like a lot, but when you compare it to the US population, it really isn’t many. What the vast majority of those with perfect (or even very high) credit scores have in common, though, is seasoned credit.
So, if you’re aiming for the moon with your credit score (and you should be), hold on to your old credit cards. As long as the accounts are in good standing, it can really pay off to occasionally dust off the cobwebs and pull out that store credit card you’ve had since you were 20 years old. The longer your oldest accounts have been open, the better it will reflect on your credit rating.
Other factors
Of course, the age of your lines of credit isn’t the only factor in determining your credit score. We all know that we need to pay our creditors off in a timely manner to keep our scores high. Most of us also know that it’s better to occasionally charge something and pay it off than it is to avoid credit altogether (at least when it comes to improving your credit score). It’s also important to keep your debt to income ratio manageable. The less debt you carry compared to the amount of income you make, the better.
Still, any trick that will raise your credit score a few points can save you a bundle of money, to say nothing of allowing you better access to credit sources. So, if you have an older credit card, or some other seasoned line of credit, use it occasionally. It’ll raise your score.