You very likely have "credit" cards.
Charge cards require payment in full, of the entire balance, each month. Credit cards require only a minimum payment and allow you to carry that balance over several or many months.
@Anonymous wrote:I have never seen any conclusive proof or evidence that the addition of a charge card in addition to a handful of revolvers adds any benefit at all when it comes to scoring. What we're talking here is the credit mix sector of the FICO pie, which to my understanding can be met with just the presence of revolving (credit cards) and one open installment loan. If anyone feels that adding a charge card somehow helped their credit mix and score, I would love to hear about it.
Preface the following with, 'Yes, this is fluff software but...."
Perhaps charge cards are considered a subset of another category or type of credit account? Per Experian, FICO considers 'Bank Issued Credit Cards' to be a subset of 'Revolving Accounts' and having a combination of subsets helps to maximize your Credit Mix factor. So with that, could a charge card be considered another subset of credit? So there would, for example, be (1) Revolving Credit with subsets of Bank Issued, Retail, Gas, & LOCs; and (2) Open Lines of Credit with a subset for Charge Cards? If so, this could mean that if one was not already maximizing their Credit Mix and obtained a charge card, they may see a boost in score. Thoughts?
I don't have a charge card so my EX service would not provide a breakdown on Charge Cards as it does for Revolving Accounts.
Nope nope and nope.
A charge card in the Amex definition is simply a revolving tradeline with a term of 1 month. That's it, it does not count for credit mix at all under any FICO algorithm ever except as a revolving account.
There's also no difference in installment loan types.
For either tradeline type, secured vs. unsecured doesn't matter either.
Old FICO algorithms, 15+ years ago namely FICO NG did apparently differentiate store cards, but from FICO 04 onward (released 2004)nothing to see on that front.
@Revelate wrote:Nope nope and nope.
A charge card in the Amex definition is simply a revolving tradeline with a term of 1 month. That's it, it does not count for credit mix at all under any FICO algorithm ever except as a revolving account.
There's also no difference in installment loan types.
For either tradeline type, secured vs. unsecured doesn't matter either.
Old FICO algorithms, 15+ years ago namely FICO NG did apparently differentiate store cards, but from FICO 04 onward (released 2004)nothing to see on that front.
Installment loans are differentiated. This has been discussed and documented on prior threads. Differentiation is explicit in Fico reason codes/statements. As you know, lack of an auto loan comes up as a reason statement for lower Auto enhanced Fico scores. That screams: missing installment loan mix element.
Mortgages are treated differently from other loans in how they are scored but, that's not a mix metric. This is apparent from the "non mortgage" wording in some reason statements and scoring data relating to B/L ratio.
Fico results do show AMEX charge cards ( 1 month terms) are differentiated from standard revolving credit cards. After all, you will get a substantial penalty associated with: "No recent revolving activity" if the only card reporting a balance is an AMEX charge card. So, if the only card you have is a charge card, it appears you are missing an important revolving credit component. That suggests differentiation.
Below is a screen print from an Equifax Scorepower (Fico 04 "mortgage") report + score I had kept. It categorizes accounts same as Fico reason statements.
Two things; first you are correct regarding auto-enhanced industry options differentiating auto loans, that was a sloppy mistake on my part.
Second: we're talking credit mix when it comes to revolving accounts and answering the secured question.
It was not a more expansive treatise on FICO scoring of accounts; if that wasn't clear, I apologize. Also you go find me any differentiation in the reason codes from FICO 04 onward on mortgages that actually show up in people's reports or from the bureaus some of those information dumps you so love to post aren't 100% accurate.