topic Re: Does the "mix" really matter????? in Understanding FICO® Scoring

Does the "mix" really matter?????

Cmikul — Sun, 22 Nov 2015 16:26:00 GMT

I always see people referring to Fico liking the "mix" of credit lines and types.

But does anyone actually have any proof or data points that having any kind of mix will actually increase their score above what would be possible without a mix?

I have always seen little to ZERO purpose in store cards. That's not to say I don't have any....but I just don't see their value in helping to boost your score.

I have installment loans, revolvers, PLOC's and one or two store cards(furniture).

The only thing that ever makes my score jump is when a baddie falls off.

Other than that it just ebb and tides in a rhythm in the same area.

I would like to take a SCT opportunity just don't see the value in scoring....

But it would be nice to have about 3 of those cards just for my personal use.

Re: Does the "mix" really matter?????

Themanwhocan — Sun, 22 Nov 2015 16:44:33 GMT

Adding an open installment loan if you only have credit cards will increase your fico score, especially once you pay down most of the balance.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Installment-tradeline-utilization-thread/m-p/4055989#M94476

We know that a mix of the major types of credit (installment, morgage, car loans, credit cards) can make a small but significant difference. What isn't known is how much, if any, improvement might be seen by having a mixture within those types. Ie, having multiple types of credit cards (bank, charge card, retail, gas company). We do know that finance company credit is seen as a negative, as it is a creditor of last resort. But will having a credit card that is issued by a gasoline company improve your mix? Will it improve your car insurance fico score? who knows?

The mix matters. But we don't know how much in most circumstances, or even if improving the mix is a positive or negative in some circumstances. You place your bets, and you take your chances. Or, not.

Re: Does the "mix" really matter?????

Anonymous — Sun, 22 Nov 2015 16:45:01 GMT

@Cmikul wrote:
I always see people referring to Fico liking the "mix" of credit lines and types.

But does anyone actually have any proof or data points that having any kind of mix will actually increase their score above what would be possible without a mix?

I have always seen little to ZERO purpose in store cards. That's not to say I don't have any....but I just don't see their value in helping to boost your score.

I have installment loans, revolvers, PLOC's and one or two store cards(furniture).

The only thing that ever makes my score jump is when a baddie falls off.

Other than that it just ebb and tides in a rhythm in the same area.

I would like to take a SCT opportunity just don't see the value in scoring....

But it would be nice to have about 3 of those cards just for my personal use.

I can speak to certain types of credit/debt. When my home improvement loan dropped off, Equifax lowered my score by 37 points. When I added my new car loan, it became a plus on the side of types of accounts and added a small number of points to all three bureaus. I have a couple of store cards that I really like and use - Amazon, Home Depot and Care Credit, which I believe is counted as a charge card. Others have good reason for the store cards and will respond to your post, I am sure.

Re: Does the "mix" really matter?????

vanillabean — Sun, 22 Nov 2015 16:48:50 GMT

If enough people say it, does it make it true?

The mix matters, but may be overrated.

Re: Does the "mix" really matter?????

Anonymous — Sun, 22 Nov 2015 16:51:16 GMT

No credit card is going to help a credit score. The only thing that really makes a score jump when you're already healthy is a mortgage with several years of payments under the belt. Tere are quite a few YOUNG people with a 760-810ish score with no real estate but that higher mountain is that big boy mix, and way over 9 year aaoa.

Once you are past 720, 740 score you just need a dig in and reward chase. As mentioned above you still have things falling off and what not your past isnt squeaky clean yet

Re: Does the "mix" really matter?????

NRB525 — Sun, 22 Nov 2015 17:11:42 GMT

@Cmikul wrote:
I always see people referring to Fico liking the "mix" of credit lines and types.

But does anyone actually have any proof or data points that having any kind of mix will actually increase their score above what would be possible without a mix?

I have always seen little to ZERO purpose in store cards. That's not to say I don't have any....but I just don't see their value in helping to boost your score.

I have installment loans, revolvers, PLOC's and one or two store cards(furniture).

The only thing that ever makes my score jump is when a baddie falls off.

Other than that it just ebb and tides in a rhythm in the same area.

I would like to take a SCT opportunity just don't see the value in scoring....

But it would be nice to have about 3 of those cards just for my personal use.

How many baddies? Those will be the biggest drag on your score, quite simply.

Getting a store card is not adding to your credit "mix". It's just another revolving credit account, and you've already got more than three regular CC, the likely sweet spot for number of revolving accounts. Said another way, FICO does not recognize and reward you for getting the SCT completed

Clarification to others: OP already has an installment loan.

Back to the metrics: What are your scores, OP? That by itself is an important place to start.

Yes, everyone is in a certain narrow range based on where their file is at a point in time. Only radical changes such as dropping baddies, paying down utilization, are the things that make a quick difference. The other factor is time, lots and lots of on time payments.

Re: Does the "mix" really matter?????

Anonymous — Sun, 22 Nov 2015 17:21:53 GMT

I've asked a couple times for someone with an "excellent" mix to post a screen shot, but no one ever has.

A little bit of research that indicates a store card will not boost your mix.

Here is a great recent thread

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Having-Store-Cards-Necessary/m-p/4277683

Here is a decent old thread

http://ficoforums.myfico.com/t5/Credit-Card-Applications/Do-I-need-a-Store-Card-in-my-credit-mix/td-p/3706041

There is some literature that indicates a true charge card will add to mix quoting FICO spokesman Anthony Sprauve

http://creditcardforum.com/blog/fico-score-credit-mix/

Revelate disputes this in his posts

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Do-charge-cards-add-to-credit-mix/td-p/2642411/page/2

Here's my screen shot. Maybe next year I will get a charge card and see what it does for me.

Re: Does the "mix" really matter?????

Cmikul — Sun, 22 Nov 2015 17:34:57 GMT

my mix registers as "very good"

As does my payment history(1 late 11months ago) amount of debt (sub 9%)

the late pymt is my one baddie....and it's recent.

my mortgage's have always been on time and time on those accts is over 15yrs. .....but my new home is only 3yrs old and I'm working on getting that equity built up.

I suspect it will just take time now that I have a lot of new cards and need my mortgage to age as well.

as of today EQ 701, TU 718, EX 696

Re: Does the "mix" really matter?????

NRB525 — Sun, 22 Nov 2015 17:35:38 GMT

@Anonymous wrote:

Here's my screen shot. Maybe next year I will get a charge card and see what it does for me.

Where is the "credit mix" image from?

And point of clarification, a Store Card is different from a Charge Card aka AMEX Green, PRG, or Platinum card.

Re: Does the "mix" really matter?????

NRB525 — Sun, 22 Nov 2015 17:38:28 GMT

@Cmikul wrote:
my mix registers as "very good"

As does my payment history(1 late 11months ago) amount of debt (sub 9%)

the late pymt is my one baddie....and it's recent.

my mortgage's have always been on time and time on those accts is over 15yrs. .....but my new home is only 3yrs old and I'm working on getting that equity built up.

I suspect it will just take time now that I have a lot of new cards and need my mortgage to age as well.

as of today EQ 701, TU 718, EX 696

I don't know the specifics around this, but anything you can do to get that one baddie off your report, that's where your biggest boost to FICO score will come from.

Maybe ask in the Rebuilding forum, see what methods may be available to pay for deletion or something, otherwise it's going to be hanging on there for many years to come, keeping your score down.

Re: Does the "mix" really matter?????

Anonymous — Sun, 22 Nov 2015 17:57:38 GMT

@NRB525 wrote:

Where is the "credit mix" image from?
And point of clarification, a Store Card is different from a Charge Card aka AMEX Green, PRG, or Platinum card.

The credit mix image is from the myFICO Dashboard "SCORES" Tab where it lists FICO 8 Score ingredients.

Clarification, nowhere above do I use "store card" and "charge card" interchangeably

The links in my post should help anyone that needs clarification

Re: Does the "mix" really matter?????

Thomas_Thumb — Sun, 22 Nov 2015 17:57:46 GMT

@Anonymous wrote:
I've asked a couple times for someone with an "excellent" mix to post a screen shot, but no one ever has.

A little bit of research that indicates a store card will not boost your mix.
Here is a great recent thread
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Having-Store-Cards-Necessary/m-p/4277683
Here is a decent old thread
http://ficoforums.myfico.com/t5/Credit-Card-Applications/Do-I-need-a-Store-Card-in-my-credit-mix/td-p/3706041

There is some literature that indicates a true charge card will add to mix quoting FICO spokesman Anthony Sprauve
http://creditcardforum.com/blog/fico-score-credit-mix/
Revelate disputes this in his posts
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Do-charge-cards-add-to-credit-mix/td-p/2642411/page/2

Here's my screen shot. Maybe next year I will get a charge card and see what it does for me.

Mix rating depends on model. My mix rating based on VantageScore is a C or POOR - primarity due to too few accounts. Lack of a 2nd type of installment loan (just have a mortgage) may be a factor as well - at least some reason statements & the VS simulator state this. Experian rates my mix as an A- based on their National Equivalency model. There is some indication that rating can take into account a ratio of revolving accounts to total accounts so some variant of that.

I am unable to find a mix rating for Fico - I don't have credit monitoring. The 3B report + score I have purchased is a PDF file - not interactive. Anyway, Here is what I got from Credit.com. As mentioned elsewhere I have 4 open revolving CCs, 1 open charge card, 1 open store card, 1 open mortgage. Closed (depending on CRA) = 1 revolving CC, 2 store cards & 1 mortgage.

Re: Does the "mix" really matter?????

Revelate — Sun, 22 Nov 2015 18:01:11 GMT

There's never been any proof that there's any difference between a mortgage and any other installment loan, and other than SL's we've got pretty conclusive data from multiple members that they're identical under FICO 8 certainly. There's been one user who's reported for auto-enhanced scores, that Student Loans didn't obviate the first time buyer penalty but every other type of installment loan did. I take that with a grain of salt.

Likewise, since FICO NextGen, there's been nothing to suggest there's any difference between a store card, a charge card, a national bank card, a PLOC, etc ad naseum. There's been one report of someone's closing their sole store card and seeing a jump but likewise without more data, I'm a little skeptical of that point.

SCT, junk card is junk card. If the card is useful, fine, but if it wouldn't be worth spending a HP on, I'd suggest it's not worth SCT either.

Re: Does the "mix" really matter?????

Anonymous — Sun, 22 Nov 2015 18:03:57 GMT

@Thomas_Thumb wrote:

Mix rating depends on model. My mix rating based on VantageScore is a C or POOR - primarity due to too few accounts. Lack of a 2nd type of installment loan (just have a mortgage) may be a factor as well - at least some reason statements & the VS simulator state this. Experian rates my mix as an A- based on their National Equivalency model. There is some indication that rating can take into account a ratio of revolving accounts to total accounts so some variant of that.

I am unable to find a mix rating for Fico - I don't have credit monitoring. The 3B report + score I have purchased is a PDF file - not interactive. Anyway, Here is what I got from Credit.com. As mentioned elsewhere I have 4 open revolving CCs, 1 open charge card, 1 open store card, 1 open mortgage. Closed (depending on CRA) = 1 revolving CC, 2 store cards & 1 mortgage.

Thanks.

If anyone has a credit mix screen shot from myFICO or can articulate the items listed in their credit mix portrayed as "Excellent" by myFICO, it would be very helpful and I would be very appreciative.

Re: Does the "mix" really matter?????

taxi818 — Sun, 22 Nov 2015 18:33:40 GMT

@Cmikul wrote:
I always see people referring to Fico liking the "mix" of credit lines and types.

But does anyone actually have any proof or data points that having any kind of mix will actually increase their score above what would be possible without a mix?

I have always seen little to ZERO purpose in store cards. That's not to say I don't have any....but I just don't see their value in helping to boost your score.

I have installment loans, revolvers, PLOC's and one or two store cards(furniture).

The only thing that ever makes my score jump is when a baddie falls off.

Other than that it just ebb and tides in a rhythm in the same area.

I would like to take a SCT opportunity just don't see the value in scoring....

But it would be nice to have about 3 of those cards just for my personal use.

Yes. the mix does matter. 10% of overall fico scoring. you may not get 10% but that is what is avaiable so meaning about 85 points in fico. store does not matter. Its all revolving. Credit Cards. Auto loan , mortgage is great mix. Personal loan. this is all you need. to max it out.

Re: Does the "mix" really matter?????

taxi818 — Sun, 22 Nov 2015 18:38:18 GMT

@Anonymous wrote:
I've asked a couple times for someone with an "excellent" mix to post a screen shot, but no one ever has.

A little bit of research that indicates a store card will not boost your mix.
Here is a great recent thread
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Having-Store-Cards-Necessary/m-p/4277683
Here is a decent old thread
http://ficoforums.myfico.com/t5/Credit-Card-Applications/Do-I-need-a-Store-Card-in-my-credit-mix/td-p/3706041

There is some literature that indicates a true charge card will add to mix quoting FICO spokesman Anthony Sprauve
http://creditcardforum.com/blog/fico-score-credit-mix/
Revelate disputes this in his posts
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Do-charge-cards-add-to-credit-mix/td-p/2642411/page/2

Here's my screen shot. Maybe next year I will get a charge card and see what it does for me.

I will post a copy of the mix and yes. i have a charge card. It says my mix is excellent. let me find it and i will post it.

Re: Does the "mix" really matter?????

Thomas_Thumb — Sun, 22 Nov 2015 19:07:45 GMT

Taxi818, Look forward to the post. Can you also please tell us your ratio of revolving accounts to total accounts

(note AMEX charge cards and store cards are typically lumped in with standard credit cards for this metric).

Inverse - Information I have seen indicates mix does look at ratio and that revolving accounts should optimally be 70% to 80% of the total mix. I suspect you are well below 50% on this ratio particularly if closed accounts are included in the calculation

Re: Does the "mix" really matter?????

taxi818 — Sun, 22 Nov 2015 19:34:26 GMT

Let me see. 21!total revolving. 26total accounts open or closed. 3 personal loans. 1 auto loan. And 1 charge. Are. The Charge card is not classified in the revolving. It's under open and had its own category.

here s a copy. It's say mix exceptional.

Re: Does the "mix" really matter?????

NRB525 — Sun, 22 Nov 2015 19:21:01 GMT

Mine has Exceptional.

This would include the toy installment loan at my CU from September which started reporting in early October, a few days before this 3B report was generated.

I have only two or three instances of store cards, all closed.

This would not include the PRG, the only "charge card" though that probably doesn't make a difference.

Current mortgage, paid off / closed mortgage

Current HELOC, paid off HELOC

And 30 total revolving accounts (per the 3B report) including a CU LOC and the noted closed store cards, and a number of closed CC accounts, two with balances. Maybe the closed accounts with balances are working in my favor as a new type of mix?

Re: Does the "mix" really matter?????

Thomas_Thumb — Sun, 22 Nov 2015 23:25:34 GMT

[Relative to the OPs question - it is well known that an exceptional credit mix is NOT needed for top scores. Heck a recent post, by Ubuntu, on MyFico stated he had an 850 Fico 8 score with no open or closed installment loans in his credit file]. Short cut to post provided below.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Our-Forums-FICO-High-Achievers-Who-has-at-least-one-FICO-Score/m-p/4339441#M101639

From the above posts with exceptional ratings both have more than 20 accounts on file - heck more than 20 revolving credit card accounts alone. Also both have a combination of installment loans (open/closed). Mix does consider closed accounts.

Outside of some potential preferred mix ratio it sure looks like a high QTY of accounts [cards] may be needed to be "Fico exceptional". Perhaps the CK table recreated below is not too far off if count is king.

21+	EXCELLENT
11-20	GOOD
6-10	POOR
0-5	VERY POOR

So far no definitive answer on whether multiple loan types are needed for Exceptional rating and whether a charge card helps - Both posters with Exceptional rating have these in their file history.

Below is an article I came across speaking to mix.

Do You Really Need to Worry About Your Credit Mix?

by Kristin McGrath

Which types of accounts increase your credit variety?

If you want to keep things simple, credit can be broken into two categories that contribute to your account diversity: (1) Revolving lines of credit (ie, credit cards) and (2) installment accounts (student loans, mortgages, car loans, etc.), says Wayne Sanford, founder of Dallas-Fort Worth–based New Start Financial.

Why does FICO reward those who have both? Keeping up with installment loans demonstrates the reliability lenders like – but these loans also come with a big incentive to make payments on time (they’re often secured with your house or vehicle). Revolving accounts give you a lot more freedom to fail, since you don’t run the risk of losing the things you bought with them.

The idea is to show lenders that you can handle both levels of responsibility.

Within revolving and installment credit accounts, there is a wealth of other account types: store credit cards, charge cards, auto loans and mortgage loans. So does having, say, a store card and a card issued by your bank contribute to your credit variety? No, according to Sprauve.

“The score doesn’t see your Sears or Macy’s card differently than another credit card,” he says.

As for charge cards, FICO does view them differently from regular revolving cards, and they would therefore contribute to your credit mix, Sprauve says. There’s just one complication: Cards marketed as charge cards don’t always report to the bureaus as charge cards. If it doesn’t show up as a charge card on your reports, it won’t be factored into the credit mix portion of your FICO as a different type of card.

“It’s hard to distinguish between how the card is marketed and how it’s reported,” Sprauve says.

What about closed accounts? Does that car loan you paid off or that card you closed still factor into your credit variety? Closed accounts stay on your reports for between seven and 10 years (depending on the circumstances), and, during that time, they will continue to get factored into your credit mix, Sprauve says.

Is there an ideal credit mix?

There’s no magic combination of ingredients for the perfect credit mix salad. Nor does FICO like certain ingredients more than others. The way FICO sees it, having a credit card and a car loan is just as good as having a credit card and a mortgage.

“The score is looking at the mix,” Sprauve says. “It’s seeing that this person has two types of credit, or this person has three types of credit, or this person has one type. But it’s not ranking one type of credit higher than another.”

A rule of thumb, Sanford says, might be to shoot for two or three revolving accounts for every installment account (while not going overboard and digging yourself into debt, of course). But even that combo might not be the best solution for every consumer.

“Every credit profile is a thumb print, and every thumb print is different,” Sanford says. “What will affect one person one way won’t affect another person the same way. It’s a loose-fitting formula.