What It Means
Credit mix refers to the diversity of credit accounts on your credit report, including revolving credit (credit cards, HELOCs), installment loans (auto loans, personal loans, student loans), and mortgage loans. Credit mix accounts for approximately 10% of your FICO score. Lenders want to see that you can manage different types of credit responsibly. However, you should never open accounts solely to improve your credit mix - the slight benefit is outweighed by hard inquiries and the risk of mismanaging new accounts. A natural credit mix develops over time as you take on different financial products for legitimate needs.
Frequently Asked Questions
How important is credit mix for your score?
Credit mix is worth about 10% of your FICO score. It is the least influential factor and should not drive your financial decisions. Focus on payment history and utilization first.
What is a good credit mix?
A strong credit mix might include 2-3 credit cards and 1-2 installment loans (auto, student, or personal). Having a mortgage also adds to your mix, but only take on credit you actually need.