When do ‘new’ accounts start to help my credit rating?

Dear James,

On my report it says a negative factor is having recently opened a new account.  How long are new accounts 'recent' for?

Kimberley, Aberdeen

Dear Kimberley,

One of the factors credit scoring looks at is the age of your open accounts. The more mature your accounts the more they will help your Experian Credit Score, basically because making the agreed payments over a longer period better demonstrates your creditworthiness. New accounts are flagged up as potentially negative in your credit report summary because lenders are likely to consider any further applications from you so soon after opening a new account as higher risk. Looking at how new accounts affect your score going forwards, the timescales in action here depend on a number of factors. Generally speaking, a single new account is likely to start contributing to your credit rating after three months, unless you’ve opened one or more additional accounts, in which case it would take more like six months before the accounts started significantly helping your score. Similarly, if the lender searched your Experian credit report before opening an account then the search footprint will no longer be considered recent after six months. Multiple new accounts, like multiple searches, are generally seen as bad news for credit scores and it’s for this reason that we encourage you to space out your credit applications, and therefore new accounts, where possible to help your credit history grow and mature in a way that will reflect positively on creditworthiness calculations.  (January 2014)

James
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