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Building Credit Cred: Build a Credit History

The longer your history of making payments on time, the better your credit score. That's why older people typically have better credit—and an easier time getting loans—than younger people. One way to build a good credit history is to keep using the same credit card for many years, instead of jumping around from card to card and closing accounts when you open new ones.

Your FICO score takes into consideration the average age of your credit card accounts. This average is calculated by adding up how long you've had each of your accounts and dividing by the total number of accounts. So, if you've had one single credit card for five years, your average account age is five years. If you've had one card for five years and have one that’s new, your average account age is two and a half years—a much lower average account age. A good strategy is to keep one card open for years (or even decades) and use it and pay it off regularly.