Financially Tough » credit mix http://www.financiallytough.com Getting Tough With Your Money Thu, 24 Jun 2010 06:51:18 +0000 en hourly 1 http://wordpress.org/?v=3.0 Is Your Credit Mix Hurting Your Credit Score http://www.financiallytough.com/is-your-credit-mix-hurting-your-credit-score http://www.financiallytough.com/is-your-credit-mix-hurting-your-credit-score#comments Fri, 08 May 2009 06:48:33 +0000 http://www.financiallytough.com/?p=109 Yet Another Related Posts Plugin.]]> A lesser talked about portion of the FICO score calculation is your credit mix.  A weight of 10% is put on what types of credit you use.  There is really no hard information about what types of credit are best to use only some general guidelines.  And if you don’t follow them your credit mix could be hurting your FICO score.

General Rule One For Your Credit Mix

Don’t use only credit cards. The whole goal of your credit score is to help determine you can manage any type of credit you apply for.  If you only have credit cards it does not paint a picture that you can handle other types of credit.  You need to branch out with the types of credit you use.  So having a auto loan and a mortgage will some you can manage other types.

General Rule Two for your Credit Mix

Don’t apply for every credit card offer you get.  The best rule is usually don’t apply for new credit unless you need it.  If you get a bunch of cards then the types of accounts you have will be in one direction.  The FICO score equation likes a healthly mix.  But really does not define what that it.  You can count that having 20 different credit cards does not qualify as a “healthly mix.”

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