The short answer is no. Your date of birth doesn’t necessarily impact your personal credit score—but the age of your credit profile does.
“What it means is the age of your credit report. Yes, your credit report has an age just like anything else,” writes Gerri Detweiler for Credit.com. “And that age has a positive or negative value in your credit scores. This value equates to 15% of the points that make up your overall credit scores. The question now becomes how the credit scoring models determine the age of your credit file and how the age impacts your credit score.”
In a nutshell, how many years you have under your belt isn’t as important as how many years your credit history does—at least so far as your personal credit score is concerned.
Having a 10- or 20-year-old credit account is good for your personal credit score—provided the account is current. This is another area without a quick fix if your goal is to build or improve your score. Detweiler recommends three common-sense pieces of advice to ensure you get the best score available in this category:
1. Get started and be patient: “We all started in the same spot, with no credit and no credit report,” she says. “If you are a young consumer or have chosen not to ever use credit than it’s time to get started.” There’s no substitute for time.
2. Do NOT try and get old accounts removed: “For some reason a very common myth floating around is that you should have old or closed accounts removed from your credit reports. Why would you ever want your history and positive payment removed from your records?” argues Deweiler. Old credit accounts don’t hurt your score—they help it.
3. Be aware that opening accounts will lower your average score: Although she’s not suggesting that opening new accounts is a bad idea, she is suggesting the new account will likely lower the average age of all your accounts—lowering your average score. “So, be selective when you are shopping for credit. Don’t open up multiple retail store credit cards around the holiday season just to save 10% off your purchase. The negative impact to your scores will cost you much more in the long run.”
As a small business owner if you’ve never opened a personal credit account, do so now. Because your personal credit score is part of what every lender will review before they approve a small business loan or offer any other kind of business credit, you’ll want to make sure you have some kind of personal credit history. The bank or credit union where you might have a debit card could be a good place to start.
