How important is it to have a mix of cc?

[Anonymous]

Some places I'll read that you should have a mix of cc and installment - that I get.  Other times, I'll read that you should have cc (I'm assuming that's visa etc.) and retail (I'm guessing that's store and gas cards) along with installment for a good mix.  How important is it to have retail cards in your cc mix?  If you have all cc with no retail will your score be lower?

[Anonymous]

10% of your FICO score is your mix of credit: Credit Scoring 101

[marty56]

IMHO It may not do anything for you FICO score but a Visa/MC card with a gas card and a store card would give you the most flexablity in terms of purchase power.  I have a Sams card as my store card and I get some great deals on Gas and they have 0% financing delas for major purchases.

Also with all the AA these days, the gas and store card could backup your Visa/MC card for emergencies.

[Anonymous]

Right, LilMirth.

That's exactly what I'm talking about - it's the source of my wondering

Your fico board link (a very nice one, which has helped me since day 1) says "-10% affects Mix of Credit. Use different types of credit (revolving; installment; auto; mortgage...) evenly."

When I look at the quote, it looks to me like I need to have cc, installment, auto, mortgage. But when I'm reading these boards, many are proclaiming the importance of having a retail in the cc mix.

My question is:

Does it matter to fico scoring (10% of the score gives it a potential for 70 or so points) if I have a retail in my cc mix?

Thanks you guys!  I'm just trying to separate the fico facts from the fico legends.  It seems to be more fun than doing my Saturday AM chores!  Okay, so I could multitask.  Fine --  I'm loading the dishwasher.......

[Anonymous]

---

@utah2009 wrote:

Some places I'll read that you should have a mix of cc and installment - that I get.  Other times, I'll read that you should have cc (I'm assuming that's visa etc.) and retail (I'm guessing that's store and gas cards) along with installment for a good mix.  How important is it to have retail cards in your cc mix?  If you have all cc with no retail will your score be lower?

---

Personally I believe that mix is most importantly affected by revolving, installment, real estate (mortgage).

I personally do NOT believe, nor have I seen compelling evidence, that having 6 major cards (Visa/MC/Discover/Amex) is less FICO helpful than 4 majors plus a store and gas.

I believe the benefits of retail/store/gas cards is that they are easier, usually, to get and can get you higher CL's sooner than major cards, which this is the benefit of those accounts.

Plus, retail/store/gas may be approved earlier than majors.  Having retail/store/gas may help you get approved for major.  So I believe it is more of a ladder effect.

If I could have all majors with no retail/store/gas, then this would in no way be less than the "mix" of revolving types.  However the horse must go before the cart and the horse often is store/retail/gas.

Message Edited by txjohn on 07-11-2009 08:04 AM

[haulingthescoreup]

We've had several members post that they got a score rise when they added their first gas or retail (non-Visa/ MC/ etc) card. But the problem, of course, is there's no way of knowing what would have happened to their score if they had added a bank/ CU card. If someone only has a couple of cards, adding anything will increase their scores.

An older version of the Credit Education site indicated pretty clearly that the presence of a gas/ retail card would help your credit mix. Now it doesn't. I don't know if that's because it never really did, or it just got lost in the update.

If it does help your mix, it only takes one. No point in getting a wallet full of store plastic, at least not for scoring purposes.

It doesn't really make sense to me, because it used to be that the natural progression of acquiring credit would be that someone would start out with store cards and eventually qualify for a bank card. But there are lots of oddball quirks in the scoring formulae, that's for sure.


eta: sorry posted before I saw txjohn's post. Distracted by the Tour de France!

Message Edited by haulingthescoreup on 07-11-2009 08:07 AM

[Anonymous]

Thanks Hauling!  As always, you help clear the fog. 

Now I can multitask - Sat. chores and the tour - makes window washing so much more fun!

[llecs]

When I started (again) 2 yrs ago, I started with 0 CCs. I saw an increase when I added my forst 2 revolving CCs with the first producing the largest increase. My 3rd CC reporting was a store card (Macys). The FICO increase off that CC was greater than the increase on revolving #2. Cards 4-12 only dropped my score from there on out.

[Anonymous]

Many thanks Ilecs - that's a data point - and my brain cell just loves data points.  That helps me understand the cc mix issue very clearly.  And it allows me to make informed decisions.  That type of information is exactly why I love these boards.