Credit is just any type of loan you might have borrowed a some point but its impact is completely shown in your credit score and report. One thing an individual must consider is their credit mix. The credit mix includes all types of credits you own so far. Just by having a diversified credit mix portfolio, you can boost your chances of getting a far better deal in the market. The reason for such benefits is that your mix directly impacts your credit score, which plays a significant role in determining your financial stance in the market.

A lot of creditors will not give you a loan if your credit score is bad, and even if they do, it will be at a very high interest rate. This type of credit can be considered as a bad deal. Apart from being responsible and punctual with your credit another way to increase the score is to diversify the credit types you have.

How Different Types of Credit Can Boost Your Credit Score - Post Blog

Types of Credit To Boost Credit Score

There are a few types of credit that can help you boost your score along with diversifying your history. These types are mentioned below –

1. Revolving Credit

Revolving credit is referred to as ongoing credit accounts where you can borrow, repay, and borrow again. The limit of borrowing is a predetermined credit limit. The best example to explain such credit is a credit card. Owning a credit card can help you improve your credit in the following ways –

a)Payment History: With ongoing credit, you will be able to make a good credit history. Paying your bills always on time will positively affect your history, significantly impacting your credit score.

b)Credit Utilization Ratio: Another way is to keep your credit utilization ratio as low as possible. Maintaining the ratio below the credit limit will keep your utilization rate lower which has its effects on the credit score.

c)Length Of Credit History: Credit history shows your behavior towards the credit and the longer history you will have, the better it will be able to showcase your nature to the lenders. This is also a big part which determines your credit score.

2. Installment Loans

These installment loans are fixed-term loans. Such a loan requires a fixed and regular payment over a specified period. These loans are personal loans, auto loans, mortgages, etc. Such loans can benefit your credit in a few mentioned ways –

a)Credit Mix – Lenders or financial institutions like to see different credit mixes on the profile. Having a diversified portfolio of credit will demonstrate the capability of the individual to manage different financial responsibilities.

b)Payment History – These loans will increase the amount of time on your credit which will increase your payment history.

3. Retail Accounts

Retail accounts are offered by retailers or departmental stores which typically come with a special financial offer like zero interest periods. Such type of credit account might not be as impactful as others but they can still benefit your credit mix and payment history.

4. Secured Credit

Such credit cards are backed by some type of collateral such as a deposit or an asset. This collateral minimizes the risk to lenders which makes it attractive to them. Secured credit cards or loans against FDs are the best examples of such type of credit. This type of credit is especially helpful for those with poor or limited credit history as it will help you in curating a payment history as well as help in building credit.

5. Mortgages Loans

We call long-term, significant financial commitments mortgages. These loans have a substantial positive impact on your credit card if managed successfully. Such loans can be deemed as most helpful in areas like payment history, credit mix, and credit history length.
These loans if always repaid on time, help in enhancing your credit report.

Altogether having a diverse credit mix will only enhance your portfolio. This will also increase your chances of qualifying for future financial aid.

Also Read: How To Fix A Bad Credit Score


The world is revolving around credit and credit score. Different types of credit can help boost your score and enhance your credit report. Credit mix diversification has become necessary in the financial world which denotes an individual’s financial stance in society. There are many ways to help boost your credit score through credit mix such as not always opting for the same types of credit again and again. Being open-minded with your credit can help you achieve your desired credit score.

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