Credit mix is the variety of account types in your credit history — revolving (credit cards) and installment (loans). It accounts for about 10% of your FICO Score. Having both types helps, but you should never take on debt just to improve your mix.
Credit mix refers to the different categories of credit accounts on your report. myFICO identifies two main types: revolving credit (accounts with variable balances and limits, like credit cards and lines of credit) and installment credit (accounts with fixed payment schedules, like mortgages, auto loans, student loans, and personal loans). A third category — open accounts, like charge cards paid in full monthly — is less common.
Having both revolving and installment credit demonstrates you can manage two structurally different repayment obligations — a credit card whose balance fluctuates every month and a fixed monthly loan payment over years. Lenders view this as evidence of broader financial management ability. That said, myFICO is explicit that credit mix is a minor factor — 10% — and that it won't compensate for poor payment history or high utilization.
No. Opening a personal loan you don't need to "add an installment account" costs you interest, triggers a hard inquiry, and adds a new account (lowering average account age). The 10% credit mix factor is not worth the financial cost of unnecessary debt. If you already have a mortgage, auto loan, or student loan, your credit mix is already well-represented. If you only have credit cards, your mix will naturally diversify when you eventually finance a major purchase.
Browse all answers
More answers to common questions about financing, banking, and credit.