How to Request IRS Tax Debt Settlement
Much of what you see about tax relief on television can be done yourself. Find out what the IRS provides to help you comply with the tax code.
Why Debt Settlement Companies Have a Bad Reputation
Instead of one bad apple, the industry is more like a bad bunch with just a couple of good apples in the mix.
Consolidate Debt in Ohio to Reduce Interest Payments
Columbus, Cleveland or Cincinnati? Eastern Ohio? Who can you trust to reduce your interest through debt consolidation?
Find debt relief with the National Foundation for Credit Counseling
The agency will help you find legitimate non-profit organizations.
Credit Counseling: How it Works
Credit counseling is a process for eliminating your high interest debt while rebuilding your credit rating. Lower fees and reduced interest are key to its success.
TeleCheck or no TeleCheck?
There may be more risk involved without it.
Too Many Bank or National Revolving Accounts
Having too many revolving accounts may interfere with your new credit application.
Writing off debt as uncollectible
The pros and cons of doing so.
Auto Leasing
You can negotiate a purchase price with the dealer when leasing.
Get Pre-Approved Car Loans Before Hitting the Dealership
If you are considering getting a car in the near future, read on to learn why you want to get a pre-approved car loan and how to do so.
Get answers now. We're here to help you!
Chat with a debt expert Monday
through Friday, 8:30am - 7:00pm ET.

Have A Question? Click to Chat.
 

Credit Mix is a Ten Percent Factor in Credit Scoring
By Kenneth Long on May 28, 2010

1188136_68499007-(1).jpgOne of the least understood components of credit scoring is the 10% of the formula that is dedicated to credit mix. Fair Isaac rewards consumers who maintain an ideal mix of credit accounts.

That statement also begs the question, "what is the ideal mix of credit?" The answer is unclear, since this may be one of the closest guarded secrets of the FICO credit scoring models.
There are some essential credit records if you want to maximize your points in this category.

First, at least one installment loan account is needed to break into higher score territory. Installment loans can be an unsecured personal loan. Secured loans, such as automobile loans can add valuable points to a credit score. A mortgage loan will give you the most benefit, since it is the largest expense most consumers will ever have.

Revolving lines of credit also provide a broad perspective to credit scoring. Store cards provide minor benefit. Major credit cards provide the biggest boost to credit mix, since they are one of the more difficult types of credit to maintain in good standing.

There are some types of credit that do not contribute points to credit mix. Having too many finance company accounts will actually deduct points, even with perfect payment histories on them. Payday loans never even show up unless you fail to repay them according to contract. SImilarly, cellular phone and utilities contracts can hurt you but will never help you.

Although no specific information has been released by Fair Isaac, it is safe to assume that having at least one or two installment loans and one or two major credit cards in your credit history will provide enough information to warrant a higher number of points. You can lose points by having too few revolving accounts or too many. Most importantly, don't open accounts just because you are trying to build a mix of accounts. Other credit scoring components contribute much more to the credit scoring formula, so your plan could actually backfire!
Current Rating: 0 (0 ratings)
Share:   Add to Delicious   Add to Digg   Add to Terchnorati   Add to Google Bookmarks   Add to Live   Add to Twitter   Add to Reddit   Add to Facebook
Get Help Now
Get started now by getting the help you need. Fill out form below.