For most, reviewing a credit report can feel like trying to decipher an ancient language. One of the things that may feel confusing is all the dates reported on your credit report. Let’s take a look at four important dates on your credit report and examine how they might impact your credit score.
The date opened, or open date, assigned to each of your credit accounts tells you when you first opened the account. This date is important because it will help determine the age of your credit history. If you have very old credit accounts, that’s a positive for your credit score. The older your credit accounts the higher your score. However, if you have a lot of very new credit accounts (less than a year old), your credit score could be negatively affected. If you’re shopping around for a loan, many lenders may be wary of you as a borrower if you’ve recently opened a lot of new credit accounts. You can figure the average age of your credit accounts by adding up the age of each account and dividing that total by the number of accounts you have. For example, if you have one AMEX account that’s 5 years old and a VISA account that’s 2 years old, the average age of your credit accounts is 3.5 years.
Date of Last Activity
The date of last activity tells you when your account took on a certain status. That status could be anything—paid, delinquent, or collections. If your date of last activity is for a negative status such as a charge off, then the older it is the less impact it will have on your credit. On the other hand, if you haven’t used a credit card in a long time and your date of last activity is many months ago, the information on your credit account may not be used when calculating your credit score. This is particularly problematic if you have few open credit accounts and you’re trying to reestablish your credit history. Try to use your credit accounts on a regular basis so that the positive information is used when calculating your FICO score. It’s important to note that the date of last activity is sometimes called ‘date of status’ or ‘date paid/closed’ depending on the credit bureau.
The date reported is the date that financial information about your account was reported to the credit bureau. This date is important because it impacts whether or not financial information such as your credit card/mortgage/auto loan balance will be used when determining your credit score. Because the balance amount on your credit accounts helps to determine your credit utilization, the inclusion of the most up-to-date information is critical. If the date reported is too old, the information may not be accurate so the credit bureau excludes the information when calculating your score.
The ‘inquiry date’ or ‘date of request’ is the date that inquiries were made on your credit report. There are two types of inquiries soft inquiries and hard inquiries. A soft inquiry occurs when a person or company checks your credit as part of a background check or a lender checks your credit to pre-approve you for a loan. A hard inquiry is when a lender checks your credit to determine if they will lend you money. Soft inquiries do not impact your credit while hard inquiries can lower your credit score a little or a lot depending on how many you have and how recent they were. Hard inquiries that are older than 24 months are not shown on your credit while hard inquires that are older 12 months old show on your credit but don’t harm your score.
If you want to improve your credit score, use your understanding of these important dates to your advantage.