What is Credit Mix? How Does it Impact Your Credit Score?

What is Credit Mix? How Does it Impact Your

Credit Score? © Clix Capital Services Pvt. Ltd. All rights reserved.

How can a credit score be impacted by the credit mix?

The financial crisis and a few unforeseen circumstances in life can make you acquainted with terms like Experian credit score, credit mix and loans. A loan is a type of financial aid granted by financial institutions and banks to borrowers in need. To obtain a loan, there is a list of eligibility criteria that every borrower needs to meet.

Certainly, comes the credit mix. It is a less known and heard term, but it takes almost 10% of your credit score and credit report. © Clix Capital Services Pvt. Ltd. All rights reserved.

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What is a credit mix? A credit mix is a composition of all the credit that you have had in the past. It is a detailed report statement that has a complete track record of the entire process of every credit that you have taken.

It accounts for all the types of credit that are available and how well you manage them. This credit mix report gives the loan provider information about how well you have maintained your credit throughout the years.

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What are the types of credit mix?

Basically, there are two types of credit, like installment and revolving credit. The types of credit need to be added when you consider taking up the right line of credit. This means you will have the right combination of two types of credit. The instalment credit is fixed and the revolving credit will keep revolving based on the available limit. In a revolving credit limit, the consumption of available limit and credit limit depends upon your credit availability.

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Instalment credit limit In an instalment credit option, the loan is available in a lump sum amount. This amount of money is repaid back on a monthly basis. The due date is fixed every month. Within that due date, the EMI or the instalment is paid. This credit can not be used once the amount is paid off. The amount needs to be completely paid off within the tenure and then again apply for a fresh loan if needed.

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