12. You Have an Off-Balance Credit Mix
Your credit “mix” refers to the variety of credit types you have on your report and accounts for about 10% of your FICO score. When you only have one type of credit on your report — such as credit cards — it’s likely your score will suffer due to lack of information.
That doesn’t mean you need to open several accounts you won’t use. But Kelly said you should have at least one credit card and keep it active by using it to pay utility bills, gas or other regular expenses — and then pay it in full each month. Also, consider getting a rewards card so you can earn cash back or points for free travel.
How to avoid it: The ideal credit mix varies, but a healthy balance might feature a credit card, a student loan, a mortgage and a line of credit. This diversity of credit shows lenders you can manage several different types of credit in a responsible way.
How to fix it: If you need to improve your credit mix, try diversifying the types of credit you have by adding a new type to your profile. Credit scores might dip when you first open a new line of credit, but they will rise again after about five regular payments, according to a CreditCards.com report.
