Let’s be real—credit scores can be confusing. You might already know that paying bills on time and keeping credit card balances low is important. But did you know that the types of credit you have also play a role in your credit score?
Lenders don’t just want to see if you pay on time—they also want to see how well you handle different types of credit. That’s where your credit mix comes in.
👉 So, what’s a credit mix?
It’s the variety of credit accounts you have, such as credit cards, auto loans, mortgages, and student loans. The more types you handle responsibly, the better it looks on your credit report.
Let’s break it all down—how credit mix affects your score, what types of accounts matter, and how to use this knowledge to boost your credit the right way.
How Much Does Credit Mix Matter?
Credit mix makes up 10% of your FICO® credit score. That might not sound like much, but when you’re working on building or repairing credit, every little boost helps.
💡 Pro Tip: While it’s helpful to have a mix of credit, it’s NOT necessary to open new accounts just to improve your score. Only take on credit when you actually need it.
👉 Where to check your credit mix?
You can see what types of accounts are on your credit report for free at:
- AnnualCreditReport.com (official free credit report site)
- Experian (offers free credit reports and scores)
- Credit Karma (free credit monitoring with insights)
Types of Credit That Impact Your Score
Your credit mix is made up of three main types of credit accounts:
1. Revolving Credit (Credit Cards & Lines of Credit)
👉 Examples:
✔ Credit cards (Visa, Mastercard, Amex, Discover)
✔ Store credit cards (Amazon, Best Buy, etc.)
✔ Personal lines of credit
How it works:
- You get a credit limit, and you can borrow as much as you want (up to that limit).
- You can carry a balance month-to-month (but don’t max it out!).
- You need to make at least the minimum payment each month.
Impact on credit score:
✔ Helps your credit utilization ratio (keeping balances low helps your score).
✔ Long-term credit cards help build credit age.
✔ Too many new credit cards can hurt your score temporarily.
💡 Pro Tip:
- Keep your credit utilization under 30% (even better if under 10%).
- Older accounts help your score, so don’t close your first credit card unless you have to!
2. Installment Credit (Loans & Mortgages)
👉 Examples:
✔ Auto loans
✔ Mortgages
✔ Personal loans
✔ Student loans
✔ Credit-builder loans
How it works:
- You borrow a set amount and pay it back in fixed monthly payments.
- Each on-time payment builds a positive payment history.
- Missed payments can wreck your score.
Impact on credit score:
✔ Improves payment history (which is 35% of your score!).
✔ Helps your credit mix by adding an installment account.
✔ Paying off loans doesn’t erase the good credit history—it stays on your report for years.
💡 Pro Tips:
- If you don’t have an installment loan, consider a credit-builder loan (small loan designed to boost your credit). Check out:
Self (Credit Builder Loan) - Refinancing a loan? It might help lower payments, but too many refinances can shorten your credit history (which can lower your score).
3. Open Credit (Charge Cards & Utility Bills)
👉 Examples:
✔ Charge cards (American Express Green, Gold, Platinum)
✔ Utilities (if reported to credit bureaus)
✔ Rent payments (if reported)
How it works:
- Unlike credit cards, charge cards must be paid in full every month.
- Utility and rent payments don’t always show up on your credit report unless you use special reporting services.
Impact on credit score:
✔ Rent & utility reporting can help build credit if added to your report.
✔ Charge cards can strengthen your credit mix but require responsible use.
💡 Pro Tips:
Want to build credit with rent? Use:
- Experian Boost
- BoomPay (reports rent payments)
- RentTrack
- Utility bills can also be reported with Experian Boost to help your score.
How to Improve Your Credit Mix (Without Taking on Unnecessary Debt)
So, should you rush to open a bunch of new credit accounts? Nope! But here’s what you should do:
✅ 1. If You Only Have Credit Cards, Consider an Installment Loan
- If you have only credit cards, adding a credit-builder loan or auto loan can improve your mix.
- Best option for beginners? Credit-builder loans (small, low-risk loans designed to boost your credit).
✅ 2. Keep Old Accounts Open
- Closing old credit cards can hurt your score because it shortens your credit history.
- Even if you don’t use an old card, keep it open (unless it has high annual fees).
✅ 3. Don’t Open Too Many New Accounts at Once
- Every new application causes a hard inquiry, which drops your score slightly.
- Apply for new credit only when needed.
✅ 4. Pay Bills on Time (Always!)
- Payment history is 35% of your score—so even one late payment can hurt you for years.
- Set up autopay to make sure you never miss a due date.
✅ 5. Use Services That Report Rent & Utility Payments
Your regular bills might not count toward your credit score—unless you report them.
Use:
Final Thoughts: Use Your Credit Mix to Your Advantage
Do you need every type of credit to have a good score? No! But having a mix of revolving credit (credit cards) and installment loans (auto, mortgage, credit-builder loans) can help.
✔ If you’re just starting out → Start with a secured credit card + a credit-builder loan.
✔ If you have only credit cards → Consider adding an installment loan when needed.
✔ If you’re trying to boost your score → Use Experian Boost to report rent & utilities.
🎯 Goal: A strong credit mix + responsible credit habits = higher scores & better financial opportunities.
Let me know if you have any questions—I’d love to help! Check out Our Blog for more info on credit!
