Credit Mix Optimization - Charge Card?

[Patient957]

Is a charge card required to have optimal credit mix in Fico 8? 

More concretely, I have 6 revolving bank cards, one store revolver (JCP), three installment loans (1 open, 2 closed).  10 TLs, nothing else.  My credit mix is "very good."

Would having an Amex charge card help tip my credit mix over from "very good" to "exceptional"?

And if so, would that benefit endure if I got tired of the AF and closed the account?

(I'm not asking whether I _should_ do this.  More interested in a discussion purely about credit mix and what is known or believed about how it is scored.)

[FireMedic1]

Charge cards dont really have a credit line. Internally yes. You charge and PIF. Its not a revolver account. So it wouldnt help much in the mix arena. My BCP just shows OK each month on my reports. Now I was late. Whole different ballgame.

[JoeRockhead]

Is it required, no. I have an "exceptional" credit mix with no personal charge cards. It's known, and published that factors such as having a mix of revolving credit and installment credit makes up your credit mix. The "mix" segment as is also fairly well known, is all about how you manage different types of credit. What many don't consider is that the age, balances and payment history of those accounts will also play a role in scoring the mix factor of your score because those factors also speak to... how you manage that mix, over time.

It's only 10% of your score, so try not to get hung up on the rating you might fall under. It's far more beneficial for your scores to manage your utilization, and your payment history. Managing those properly to achieve optimal scores is what will bring you the best rates and offers.   

[SouthJamaica]

---

@Patient957 wrote:

Is a charge card required to have optimal credit mix in Fico 8? 

More concretely, I have 6 revolving bank cards, one store revolver (JCP), three installment loans (1 open, 2 closed).  10 TLs, nothing else.  My credit mix is "very good."

Would having an Amex charge card help tip my credit mix over from "very good" to "exceptional"?

And if so, would that benefit endure if I got tired of the AF and closed the account?

(I'm not asking whether I _should_ do this.  More interested in a discussion purely about credit mix and what is known or believed about how it is scored.)

---

I'm guessing, but I don't think so. I've never had a charge card that reports to personal, and my user interface says "exceptional" for credit mix.  I have a hunch a charge card is just considered another bank card for "credit mix" purposes.

What I have had, that you do not seem to have, is a personal line of credit.  So maybe adding an overdraft line of credit at a credit union would solve that.

But I doubt it's really impacting your score in any significant way.

[Patient957]

---

@JoeRockhead wrote:

What many don't consider is that the age, balances and payment history of those accounts will also play a role in scoring the mix factor of your score because those factors also speak to... how you manage that mix, over time.

---

Are you saying that age and payment history facor into the 10% for Credit Mix?

I was under the impression that all age factors were capured under Age of Credit and all payment history was captured under Payment History.  I thought one could have an excellent credit mix as long as they had the correct number of accounts in the correct propotions, regardless of whether they had a bunch of late payments or a young file.

[Patient957]

---

@SouthJamaica wrote:

But I doubt it's really impacting your score in any significant way.

---

Agree.

[JoeRockhead]

---

@Patient957 wrote:

---

@JoeRockhead wrote:

What many don't consider is that the age, balances and payment history of those accounts will also play a role in scoring the mix factor of your score because those factors also speak to... how you manage that mix, over time.

---

Are you saying that age and payment history facor into the 10% for Credit Mix?

I was under the impression that all age factors were capured under Age of Credit and all payment history was captured under Payment History.  I thought one could have an excellent credit mix as long as they had the correct number of accounts in the correct propotions, regardless of whether they had a bunch of late payments or a young file.

---

The purpose of the credit mix portion of your score doesn't strictly evaluate whether, or not a person can get different types of credit. It more heavily evaluates how a person manages those different types of credit. That's done by factoring in the payment history, as well as how long the mix has been properly managed.

If you had an exceptional mix rating, then,  in an extreme example, you had a CO on a loan or credit card, you'd no longer be viewed as properly managing your credit mix, and a downgrade in that rating would likely follow in accordance to the level of failure.  

I look at this portion of the score as a bonus segment of scoring, an opportunity to maximize scores. How many points are available in the credit mix? Someone else will have to answer that.

[Patient957]

---

@Patient957 wrote:

Is a charge card required to have optimal credit mix in Fico 8? 

More concretely, I have 6 revolving bank cards, one store revolver (JCP), three installment loans (1 open, 2 closed).  10 TLs, nothing else.  My credit mix is "very good."

---

Update.  Since this post 9 months ago, I've added 2 additional bank cards, and nothing else.  My Credit Mix went from Very Good to Excellent.  I don't think I got any extra points out of it, though, but it's hard to say for sure, because it was muddled with a point loss for the new revolver penalty.  If there were any points, it would only have been a couple.

[Thomas_Thumb]

Thanks for the update.

QTY is king for achieving an excellent mix rating. You crossed over a QTY threshold.

Fico classifies AMEX charge cards as open accounts with 1 month terms - not as an revolving account. I've always had an AMEX but my mix languished at very good even though scores were 850.

I have 6 cards including 1 AU account but only 3 bank cards per Fico. So, QTY of bankcards might influence mix rating as can total accounts of all types (open+closed).

From past surveys, fewest total accounts for excellent/exceptional mix rating appears to be 11. Both types, revolving and installment, need to be on file.

[FicoMike0]

Fwiw, Here's my data. All ex from myfico.

Accounts, 14

10 bank card, 9 open, 1 closed. 

2 closed listed as "charge account" sync amazon, sync lowes.

2 installment loans, listed as "other", 1 open, 1 closed.

2 inquiries

Credit mix, exceptional

F8 817

Edit, I think the sync were store cards.