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11-07-2013 12:03 AM
Excuse my post if this is the wrong section of the forum.
I've been building my credit over the past few months. It's hard to believe that just 4 months ago, I was struggling to get my "chance" at credit. I've done well so far.
One thing I had seen before that (From what I have seen) is a factor in your FICO is the balance between revolving (Cards) and installment (Loans) credit. Well, right now I have 100% revolving credit.
So is this true? Does it matter, and if so what's a good balance between the two?
And what would be a good way to get an installment line of credit that reports positives? I don't need house, car, or student loans. I'm not sure where to start.
11-07-2013 12:19 AM
11-07-2013 01:32 AM
Just the answer I was looking for. Thanks!
Maybe one day down the road I'll find I need a loan on a car or something and I can expand. For 10% of a score, I'm not going to get a loan and pay interest, not for 10%!
11-07-2013 06:12 AM
+1 to what the always wise Lexie says.
My score is in the high 700s with just credit cards and I believe there are a few MyFicoers or their family members whose scores are 800+ on credit cards alone.
11-08-2013 08:20 AM - edited 11-08-2013 08:23 AM
Excerpt from myFICO:
Types of credit in use
Credit mix determines 10% of my FICO Score
In a score range from 300-850 which is a 550 point range, 10% accounts for 55 points. That could easily make a difference between over and under 800.
Also, when myFICO says what determines what percent of FICO, which FICO score are they referring to? They have 49 different versions developed over different periods of time for different use. It's hard to believe that when FICO says 35% payment history, 30% amounts owed, etc. that it applies to every single one of the 49 versions as if the % determinants were set in stone since the beginning and they can't diverge from it. For example, A bankcard enhanced FICO score for example is supposed to put more weight on credit card history. If so, then a credit mix could easily be less important in that version. Also, if the ultimate purpose of developing FICO scores is to determine the credit worthiness of people, there is no reason to set certain % to this criteria and certain % to that criteria. Times change and peoples behavior change. What FICO thought mattered more in 98 could easily be different from what they discovered by 2008.
But I guess no one really knows except for the FICO score developers themselves. We're really all just guessing and it seems that FICO likes to keep it that way.