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Question By
UnclePuppy

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Paying off recent loans to improve average age of credit history?
I've recently moved back to the US and took out a personal loan and opened up a personal line of credit with my bank in the (mistaken?) belief that having more accounts would boost my credit. However as a consequence my average age of credit has been hammered and I think this might've had a greater impact on my credit score than the fact that I've got two additional accounts to my name. Prior to this I only had the one credit card which has been active for over 4 years, which I know still isn't great, but now my average age of credit has dropped to 1 year 3 months or something. I'd like to get an idea of whether paying off my personal loan, which I took out in the last 4 months or so, would remove it's impact on my average age of credit?

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There is nothing that you can do to undo the loss of "average age of accounts". Paying off the loan and closing it will NOT undo the damage to your aaoa. Closing the loan would HURT your scores, so keep it open. You did do the right thing by opening more accounts, while it does reduce the aaoa, it is something that you had to do to get your credit growing for the long term. Hard inquiries and lowering the aaoa are necessary evils in order to build healthy credit. I urge you to spend a lot of time reading everything that you can on credit, the information is extremely valuable and taking the time needed to read it will really help you for the future.

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UnclePuppy

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Thank you very much for the advice!

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