A credit report may show a credit card, an auto loan, or both. That combination is your credit mix: the types of credit accounts in your history. It can affect a credit score, but it is a smaller factor than your record of paying bills. Before considering a new account for the sake of your mix, it helps to know what the factor measures and what it cannot tell you.
What credit mix means
Credit accounts generally fall into two groups. Revolving credit, such as a credit card or line of credit, lets you borrow up to a limit, repay what you owe, and borrow again while the account remains open and in good standing. An installment loan, such as an auto, student, or mortgage loan, starts with a fixed amount that you repay through scheduled payments. The lender typically closes the loan account after it is paid off.
If you look at your credit report, try sorting the accounts into those two groups. That gives you a concrete picture of the mix recorded there. It does not tell you exactly how any particular score will change: scoring models consider other information on the report, too.
How much does credit mix count?
In FICO’s published breakdown, credit mix accounts for 10% of a score. Payment history accounts for 35%, amounts owed for 30%, length of credit history for 15%, and new credit for 10%, according to MyCreditUnion.gov’s explanation of credit scores. These are model-wide weights, not a formula for predicting how many points one account will add or subtract from your score.
FICO says credit mix is unlikely to be the deciding factor in a loan application, though it can play a role. Other models organize the information differently. VantageScore groups credit mix with credit age, calling the combined factor “depth of credit.” The latest model described in this overview of credit mix assigns that combined factor a 20% weight. That is not a 20% weight for mix alone. It is one reason the two sets of percentages should not be compared as if they measured the same thing.
Why would different account types matter?
Managing more than one kind of credit can give a scoring model information about how you handle different repayment arrangements. A revolving balance can change from month to month. An installment loan has a scheduled series of payments. Creditors may view a history of managing both as one indicator of lending risk, but a lender’s decision can also depend on information beyond a credit score.
Mix does not erase missed payments. FICO considers the payment history on the account types in a report as well as the types themselves. For example, an auto loan may add an installment account to a report that already has a credit card, but late payments on that loan still matter. That is why the larger payment-history factor deserves more attention than the simple question of whether both account types appear.
Should you open an account just to change your mix?
A new account is a consequential way to pursue a relatively small score factor. Applying may produce a credit inquiry, and a newly opened account can affect the new-credit and credit-history information a scoring model considers. A loan also comes with repayment obligations. Both MyCreditUnion.gov and FICO caution against opening credit you do not need solely to improve a score.
Claims that several new loans will reliably boost a score deserve particular skepticism. The sources do not establish a point gain from adding an installment account, a timeline for when a new account might affect mix, or a predictable effect when an account closes. The useful question before any application is more basic: Do you need the credit for a purpose other than changing the mix shown on your report?
What can you check in your own report?
Start with the accounts already listed. Which are revolving, and which are installment? Are payments being reported as expected on each? If you see an account or payment record you do not recognize, check current official consumer guidance on reviewing reports and addressing possible errors. A qualified professional can help with questions specific to your situation.
If a lender gives you information about a score it used, you can also ask which scoring model and version it relied on. FICO and VantageScore group credit mix differently, and a score alone does not reveal how much this one factor affected a decision. Credit mix is useful context for reading a report, not a guaranteed route to a particular score or approval.
Please seek a professional. This article is general information, not financial, tax or insurance advice. Please seek a licensed financial, tax or insurance professional about your own situation.
