What Is Credit Mix (and Does It Matter)?
This guide explains what credit mix is, how much it affects your score, and why you should not chase it.
What credit mix is
Credit mix refers to the different types of credit on your report. The two broad categories are revolving credit, like credit cards and lines of credit, and installment credit, like auto loans, student loans, mortgages, and personal loans. Scoring models like to see that you can responsibly handle more than one type.
How much it matters
Credit mix is one of the smaller ingredients in your credit score, generally around 10 percent, far behind payment history and utilization. So while having only credit cards is not a problem, adding an installment loan over time can give a modest lift, and someone with both cards and a loan, all paid on time, tends to show a slightly stronger profile.
Why not to chase it
Because the effect is small, it is never worth borrowing money you do not need just to diversify your mix. The interest on an unnecessary loan would dwarf any minor score benefit. Let your mix develop naturally as you take on a car loan or mortgage for real reasons, and focus your energy on the big factors, paying on time and keeping utilization low.
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