Definition
The variety of credit accounts you have, such as credit cards, mortgages, and loans. A diverse mix can positively impact your credit score.
What to consider
- Diversify your credit by having a mix of revolving and installment accounts.
- A balanced mix can positively influence your score.
- Manage each type responsibly to maintain overall financial health.
Real world scenarios
- Nicole holds a mortgage, an auto loan, and a single credit card, demonstrating her ability to handle diverse credit responsibilities.
- After years of only having a credit card, Edwin considers a small personal loan to broaden his credit mix and boost his score.
- Joan reviews her credit report, confirming she has a balanced mix of revolving and installment accounts that lenders favor.
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