Creating multiple sources of improving credit history is not a risky idea until you are playing safe with all the sources. Your credit score, as quite popular, makes a huge difference when it comes to financing. So, do proper research for ways to maintain a balanced credit score with a good credit mix. Be it for the purpose of getting a loan, an investment plan, or for any financial transaction, your credit score can really affect your decision.
As financial institutions are highly concerned about the way you have been maintaining your finances, it is vital for you to go balanced. Let's see how different modes of credit affect and boost your credit score.
A credit mix is nothing but the various sources of credit accounts you have. Altogether it is termed a credit mix. It includes credit cards, mortgages, loans, etc. A credit mix is one of the different factors that a lender may pay attention to, before lending you money. A balanced and diverse credit makes you a promising customer.
Have you ever wondered what is a good credit mix and how credit mix is a central player of your credit score? This is because a substantial part of your credit score is your credit mix. A lender focuses on your ability to repay the borrowed money which is clearly expressed by your credit mix. Having debt from various sources and repaying the instalments on time indicates you have good control over your debts. Hence, it makes your loan application a promising one. On the other hand, if you have a less credit mix, it may not particularly affect your credit score but having a diverse credit mix and repaying all the instalments on time really helps hike up your portfolio.
A credit score is a gateway to several financial benefits and aid you may need in your future. So, it is quite essential that you take care of every factor that affects your credit score, including the credit mix. Having a low credit mix can limit your credit score, and reaching a good score can become quite difficult. So, some lenders may not count it as a good sign, though it may not essentially bring down your score. Hence, maintaining a good credit score is the key.
Try maintaining a financial history as strong as you can. For this, you must look for ways that can improve your credit score. Pay off your debts on time without any delay to play clean. Keep checking your credit score and keep hiking it up!
Articles on CIBIL