CIBIL: What is credit mix and how does it impact your credit score?
credit score. Lenders like to see that you can manage different kinds of debt responsibly. It means it can positively impact your credit score.
However, it’s vital to note that you shouldn’t take on new credit in order to improve your credit mix. Opening new accounts can, for the time being, lower your credit score due to inquiries and the average age of accounts. Instead, focus on maintaining a mix of credit accounts over time and managing them responsibly.
A number of credit scoring models consider the diversity of your credit accounts at the time of calculating your credit score. It is vital to note that the impact of credit mix on your credit score can vary based on individual circumstances and the particular credit scoring model that is being used. This refers to the different credit accounts you have on your credit report.
These include car loans, credit cards, student loans, personal loans, among others. A number of credit scoring models consider the diversity of your credit accounts at the time of calculating your credit score. ALSO READ: From high interest rate to limited funds, 5 main consequences of a low credit score The impact of credit mix on your credit score can vary based on individual circumstances and the particular credit scoring model that is being used.
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