Credit Mix

[MrTom]

Does anyone know anout Credit Mix?

What are all the types of accounts that help credit mix.  Just looking for a list of bullet points.  I just want to compare the list to my credit to see which accounts I need to add to increase the credit mix.

[marty56]

Having an installment loan (car, home) help your FICO score.  Having a CFL loan will hurt it.  I would not open an installment loan unless you need too.  Same goes for any type of credit.  Before looking at credit mix, you would need to make sure your util is under control and if you have derog info on your CR, a plan to deal with it.

[Glen_M]

The ones that will have the largest impact and affect the broadest range of scores are simply:

• Revolving Lines of Credit: common example = credit card.
• Installment Credit: common example = auto loan.

For most purposes it is beneficial to have several revolvers.  People will usually reccommend keeping 3, 5, or 7 of them because there are some finer details having to do with maintaining a balance on less than half of your accounts, and odd numbers are convenient for that. 

Depending on which score you're talking about, it may be beneficial to further break installment credit down into sub-categories.  Mortgages in particular can have special influence on some scores.  If you don't have any active installment loans, many people here will recomend picking up a secured loan that has some certian features in its payment schedule that will allow you to get a 30 point boost while paying negligible interest for the life of the loan.  In this category it is also worth menitoning that there are some types of installment credit that will actually have a significant negative impact - consumer finance loans. 

Really just two catgories to be concerned with, but knowing if there is a specific purpose you're trying to improve your score for could help add further details.  For example, are you planing to apply for a credit card, auto loan, mortgage, etc.  Also, knowing what types of accounts you already have and what balances they carry can determine if adding another account will make an impact or not.

[MrTom]

I was looking for broken down details.

What type of revolving accounts does credit mix look into?

For revolving accounts, does a store card in the mix of credit cards help?

I am not looking for revolving and installment as an answer for credit mix.  I am looking for the exact account types credit mix looks for.

[Anonymous]

There's no hard evidence that sub-types of credit (within the "big two" of Installment and Revolving) help the Credit Mix portion of any FICO score.  The only exceptions being what you have been told by an earlier commenter:

*  The sub-type of a Consumer Finance Account harms your score.

*  The sub-type of a true credit card helps your score, up to perhaps three.

Some people have speculated that a charge card (as opposed to a credit card) might help one's Credit Mix, but even those who suggest this acknowledge that it is highly speculative -- they don't have any firm (or quasi-firm) evidence of this.  Charge cards almost all have an annual fee associated with them and thus it would be a terrible idea to add an account that you pay a fee for solely for a score advantage that is likely nonexistent and if it does exist is a few points.

Similarly for sub-types of installment accounts.  It's conceivable that a mortgage gives you some advantage but there are many people with an 850 score and no mortgage.  Adding a mortgage or an auto loan (say) purely for scoring help would again be an expensive way to chase what is likely a phantom benefit.

To answer your question about store cards -- no, FICO does not give you any scoring advantage for having a store card.  Other scoring models, however, punish you for havoing store cards -- e.g. the LexisNexis model used by the insurance industry.

In short, a few credit cards and one open loan that is mostly paid off is all you need for the Credit Mix part of your score.

Do you have an open loan?  If not we can suggest a very cheap way to get that loan (pennies of interest) and for it to be mostly but not entirely paid off.