What is credit mix and how does it affect credit scores?

Credit mix is one of several factors that affect your credit scores. It considers your credit diversity, or the different types of credit that you have on your credit report. This could include credit cards and a mortgage, for example. 

But what exactly is a credit mix? What’s a good credit mix? And how does credit mix affect your overall credit scores?

Key takeaways

• Credit mix is one of the factors used to calculate credit scores.
• It’s an indication of a borrower’s experience managing multiple types of loans.
• Revolving accounts, such as credit cards, are an example of one type of credit.
• Installment accounts, such as car loans and mortgages, are another type.

Your credit mix is the combination of the credit accounts listed on your credit report. This can include revolving credit, like credit cards, and installment credit, like car loans, and mortgages.

Typically, a good credit mix includes a variety of different types of credit. If you use them responsibly,  you show lenders that you can handle a variety of different credit accounts.

There are two kinds of credit: revolving and installment, or nonrevolving, credit.

• Revolving credit: Revolving credit refers to an open-ended credit account—like a credit card or other line of credit—that can be used and paid down repeatedly as long as the account remains open and in good standing.
• Installment credit: With nonrevolving credit, you can borrow the amount only once. And the account is closed permanently after it’s paid off. Some common types of installment accounts include auto loans, mortgages and student loans.

Remember, how you handle your credit mix gives lenders an idea of your ability to handle a variety of different credit accounts. This might explain why credit mix is one of several factors used to calculate your credit scores. 

Keep in mind that a diverse credit mix won’t help your credit scores if you don’t use your credit responsibly.

How much credit mix affects your scores depends on the credit-scoring model. FICO® and VantageScore® are two credit-scoring companies that provide some of the most commonly used scores. When calculating credit scores, FICO says credit mix accounts for 10% of its scoring. VantageScore doesn’t give percentages, but it says credit mix is “highly influential.”

A positive history of on-time payments is considered the most important credit-scoring factor.

Understanding credit mix and the role it plays in your credit scores is important if you’re trying to maintain your credit or improve your credit scores. And monitoring your credit can help you see exactly where you stand—as well as how much progress you’ve made.

One way to monitor your credit is with CreditWise from Capital One. CreditWise gives you access to your free TransUnion® credit report and weekly VantageScore 3.0 credit score anytime. Using CreditWise won’t hurt your scores. And it’s free and available to everyone—even if you’re not a Capital One customer.

You can also get free copies of your credit reports from all three major credit bureaus: Equifax®, Experian® and TransUnion. Call 877-322-8228 or visit AnnualCreditReport.com to learn more. Keep in mind that there may be a limit on how often you can get your reports. You can check the site for more detail.