 TITLE: How the Right Mix of Credit Can Boost Your Credit Score CONTENT: Multiple factors determine your credit score, and two main credit scoring models—FICO® and VantageScore®—have similar criteria in calculating those scores.\nIn general, there are four main categories that impact your credit. The most influential factor is **payment history**, which makes up 35% of a FICO® credit score. If you make your debt payments on time every month, your credit scores will likely improve.\nWhen you miss a payment, the lender may report it as late. Because the credit scoring models put so much weight on payment history, this could seriously impact your scores. That doesn't mean you have to pay off your balance in full every month (though it certainly doesn't hurt). Even paying the minimum or just a portion of your balance—on time—will have a positive effect.\n**Credit utilization** is the next biggest component, making up 30% of your credit score. Your credit utilization rate is based on how much of your available credit is being used, and only considers revolving credit such as credit cards. Low credit utilization signals that you're a responsible borrower, whereas high utilization indicates an unhealthy reliance on credit to fund your lifestyle.\nIdeally, you should keep your credit utilization rate below 30% overall and on each individual credit card. To calculate your utilization, determine your total available credit and multiply it by 30%. Stay below that number or risk hurting your credit scores.\nThe third most important factor is the **length of credit history**, which is the average age of all your credit accounts. These are counted from the date you opened the account and include only currently active loans or lines of credit.\nA high credit age reflects well on your credit report, while a young one may drag down your scores. While you can't change these numbers overnight, paying your bills on time over months and years will help you as your credit history lengthens.\nThe final component of a credit score is the **credit mix**, determined by how many different types of revolving and installment credit you have (see below). Credit mix counts for 10% of a person's FICO® credit score.\nMaintaining a mix of credit demonstrates that you can handle multiple types of loans. Along with the other elements above, improving your credit mix can help you reach excellent credit score status.\nBe aware, however: Filing for bankruptcy, having a debt go to collections and being evicted will also be reported on your credit report and will negatively affect your credit scores. END