What is Credit Mix and Is It Worth It?
Learn about the importance of credit mix in just two minutes or less. Check out the full blog post below to learn more about the following factors of building credit: what credit mix is, what creditors look for, and why credit variety is key.
Just like a salad, when it comes to building your credit history, it’s good to have a healthy mix. That means a mix of revolving credit and installment accounts.
Let’s say this feta is my credit card—that’s revolving credit. Not bad, but adding another credit card can improve your mix. It’s also good to add a different kind of credit for even more variety—installment accounts. Things like an auto loan, a mortgage, or a personal loan... these are all installment accounts.
Remember, a mix of revolving credit and installment accounts is a good thing.
It’s important to note that you shouldn’t open up accounts you don’t intend to use. Seriously, you don’t want to take on debt if you don’t have to.
If you’re trying to establish credit, don’t forget that credit diversity helps your score. It accounts for about 10% of it. With a better mix, my credit history—and my salad, are that much more appealing. Not to mention delicious.
Remember, building a credit history takes time. But with good habits, you’ll start to see your credit score move in the right direction. For more expert tips and info, check out the full article on the RISE blog.
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