Hello {first_name},
So far, we’ve covered Payment History (35%), Credit Utilization Ratio (30%), and Length of your Credit History (15%). Next we’ll look at your Credit Mix (10%)
Lenders like to see a mix of different types of credit so they know you can handle making payments on time. Let’s look at the two primary types of credit and what they mean.
Revolving Credit Accounts are accounts that give you more options when it comes to the amount you pay monthly. Obviously they will have minimum payments required, but you can pay higher than the minimums to pay them off sooner. Some types of revolving credit accounts are:
Gas Station Cards
Retail Store Credit Cards
Credit Cards
Home Equity Line of Credit (HELOC)
Installment Loans are loans with a specific amount and fixed payments.
Examples of these are:
Auto Loans
Home Loans (Mortgage)
Student Loans
Personal Loans
While there is no specific rule as to what your “mix” should look like, you don’t want to have all of one type or the other or it can lower your score. Even though it’s only 10% of your score, keep an eye on this and do try to have some mix on your report.
Next, we’ll cover the last aspect of the reports, inquiries. This part accounts for the last 10% of your score, but it’s an important one.
Sincerely,
{{ custom_values.slm__representative }}
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