Reply
Valued Member
Jack_Sparrow
Posts: 44
Registered: ‎05-31-2007
0

Can someone explain different types of credit usage to me?

This is currently my biggest confusion in FICO scoring. Let's say I don't have any installment or mortgage loans. How much variety can I have with without those? I heard dept store cards help. Does it really help to have a Visa, MC, Discover, and AMEX? (is each one important)
Valued Contributor
oracles
Posts: 1,699
Registered: ‎08-18-2007
0

Re: Can someone explain different types of credit usage to me?

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654 start with this
Established Contributor
FICO_Focused
Posts: 905
Registered: ‎05-09-2007
0

Re: Can someone explain different types of credit usage to me?

[ Edited ]
Payment history: 35%, Amounts owed: 30%, Length of credit history: 15%, New credit: 10%, Types of credit used: 10%
 
Hope this Helps.
 
As you can see only 10% of your score is dependent on the mix...  The big ones are Hx and revolving debt to available credit (Utilization)
 
Hit my signature links for additional info.
 
Rob


Message Edited by FICO_Focused on 08-24-2007 01:58 PM
Valued Member
Jack_Sparrow
Posts: 44
Registered: ‎05-31-2007
0

Re: Can someone explain different types of credit usage to me?

I understand that credit mix is 10%, but I want an in depth explanation of that. No one has answered my questions:
 
- Will it affect my score to have a Visa, MC, Discover, and AMEX, as opposed if I had 4 Visas?
 
- Should I get a dept store card to help with my mix?
Moderator Emeritus
fused
Posts: 16,374
Registered: ‎03-12-2007
0

Re: Can someone explain different types of credit usage to me?



Jack_Sparrow wrote:
I understand that credit mix is 10%, but I want an in depth explanation of that. No one has answered my questions:
 
- Will it affect my score to have a Visa, MC, Discover, and AMEX, as opposed if I had 4 Visas?
 
- Should I get a dept store card to help with my mix?


Visa, MC, Discover and Amex (revolving, not charge cards) are bank cards and it doesn't matter if you have three of the same or one of each...they're equal and in FICO scoring carry the same weight.
 
Store cards are not bank cards and having 1 or 2 does help with your credit mix. Bank cards carry a lot more weight in scoring than do store cards. How much, well nobody really knows...it's FICO's secret.
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1 (Amex 07-15-2014)

New Member
metalboy50
Posts: 3
Registered: ‎08-29-2007
0

Re: Can someone explain different types of credit usage to me?

People are forgetting that store cards are issued by banks as well. The bigger issue to think about is how much credit one has available relative to their debt. So, to answer the question, having a mix of credit counts, but remember that ALL accounts add up to the pot. Jack_Sparrow: Depending on how much credit you have available to you, consider that you don't want too many accounts, but it doesn't hurt to have a retail card. However, don't get one unless you use it because you will get hit for an inquiry for nothing. Only get credit you will use.
Super Contributor
MidnightVoice
Posts: 8,158
Registered: ‎03-25-2007
0

Re: Can someone explain different types of credit usage to me?



metalboy50 wrote:
People are forgetting that store cards are issued by banks as well. .

True - but a store card can only be used in a store, a true CC can be used anywhere.  That is possibly why FICO gives more weight to CCs and less to Store Cards.
 
And there are store cards and CCs issued by stores - these are different.  I have a gas card that can only be used in the company's gas stations.  I also have a CC issued by a gas company (via Juniper) that is a true CC
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Moderator Emeritus
fused
Posts: 16,374
Registered: ‎03-12-2007
0

Re: Can someone explain different types of credit usage to me?

[ Edited ]
:smileyindifferent:


Message Edited by fused111 on 08-29-2007 07:11 AM
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1 (Amex 07-15-2014)

Super Contributor
MidnightVoice
Posts: 8,158
Registered: ‎03-25-2007
0

Re: Can someone explain different types of credit usage to me?



fused111 wrote:
:smileyindifferent:


Message Edited by fused111 on 08-29-2007 07:11 AM


I was just trying to be polite  :smileyvery-happy:
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Moderator Emeritus
fused
Posts: 16,374
Registered: ‎03-12-2007
0

Re: Can someone explain different types of credit usage to me?

Read my lips...bank (major) credit cards carry more weight than store cards not issued by banks.:smileyvery-happy:
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1 (Amex 07-15-2014)


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+