I'm looking to apply for another credit card. I have a few specific ones in mind, so I'd like to build some credit history before I apply. I've been told before I don't have enough "credit history".

I had three accounts. The first and oldest is a starter credit card from my credit union. The second was a loan from the same credit union for a motorcycle. The third and youngest loan was taken from a second credit union, also for a motorcycle. I've had no derogatory marks and all my bills have been paid on time.

I made a mistake in paying off my second oldest account of three, thinking that lowering how much I owed would improve my score. This is how I found out that only open accounts are being averaged. My credit score dropped by 50 points.

So my question is two-fold:

For "credit history", is it more important to have a higher average age or more accounts? More specifically, would paying off the newest loan, to bring up my average, be a good course of action considering my goal?

I'm aware that there are a lot of variables and that the answers might not be 100% correct. I'd just like to see your opinions or experiences on this topic.

  • I don't know the formula -- I understand that the formulas are actually trade secrets -- but I do know that they're often nonsensical, or at least, ,counter-intuitive. I recently got 2 new credit cards. I got them because they were from airlines and offered many free miles if I spent enough on them. I would think that logically that should have reduced my credit score: I've applied for more credit for reasons unknown to the credit rating agencies, and I've taken on additional debt. In fact my credit score went UP, apparently because my ratio of debt divided by available credit went down. Hmm. – Jay Nov 8 at 18:30

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