Different people have different opinions on what the perfect credit mix is.
Some people think it’s best to have a mix of different types of credit, while others think that it’s better to just focus on one type.
The perfect credit mix is having 2 primary trade lines- the revolving line and the installment lines.
In order to have, what FICO considers a solid foundation credit mix, you need to have 5 primary revolving trade lines and 3 primary installment trade lines.
Trade line means you are the responsible party for that line or installment credit.
Here’s the mathematical equation to achieve the 700 credit score:
5 parts = 550 points
I. Payment History (35%) = 192.5 points
II. Revolving Credit (30%) = 165 points
III. Credit Mix (10%) = 55 points
IV. New Credit (10%) = 55 points
V. Credit Age (15%) = 82.5 points
Following this equation will help you achieve your 700 credit score goal.
Your credit is your financial leverage. It helps you get things that you need at a lower cost and keep what you have.
Learn more about it by watching this video. Click here.