Definition
Credit mix refers to the variety of credit accounts in your credit report, such as credit cards (revolving accounts), car loans, mortgages, personal loans (installment accounts), and retail accounts. It accounts for approximately 10% of your FICO score. Lenders generally prefer to see that you can manage different types of credit responsibly, as this suggests lower lending risk. While less influential than payment history or credit utilization, having a diverse credit mix can help optimize your credit score, especially when you're trying to build or improve credit.
Frequently Asked Questions
What is considered an ideal credit mix?
An ideal credit mix typically includes at least one revolving account (like a credit card) and one installment account (like a car loan, student loan, or mortgage). Having experience with both secured loans (backed by collateral) and unsecured credit can also be beneficial. However, you shouldn't take on unnecessary debt solely to diversify your credit mix—only apply for credit you actually need.
How much does credit mix affect my credit score?
Credit mix accounts for approximately 10% of your FICO score, making it less influential than payment history (35%) and credit utilization (30%), but still significant. Its impact is usually more pronounced for people with limited credit histories, where there's less other information to evaluate. For those with established credit, focusing on payment history and utilization will generally yield more significant score improvements than adjusting credit mix.
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