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Advice

How to get a good credit mix and boost your credit score

Having a variety of credit factors into having a good credit score. Here's how to diversify your credit and show you can manage different types of debt.

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If you have at least one credit card and a car payment and/or student loan in your name, you may be surprised to learn that you already have a good credit mix.

The two most common types of credit accounts are revolving and installment credit. Both can have an impact your credit score, however their borrowing and payment structures differ. 

Your credit card account, which you charge and make varying payments on each month, counts as revolving credit. Your balance is forever changing and there is no particular end date to having this type of credit (unless, of course, you close your credit card account).

Your car payment or student loan, for which you make the same, fixed payment on each month, counts as installment credit. With this type of credit, you have a set balance divided out equally into a series of payments due each month until the specified end date.

Having both revolving and installment credit makes for a perfect duo because the two demonstrate your ability to manage different types of debt. And experts would agree: According to Experian, one of the three main credit bureaus, "an ideal credit mix includes a blend of revolving and installment credit."

How to get a good credit mix

If you are aiming to achieve a good credit mix, first know what counts as installment credit: student loans, auto loans, mortgages and personal loans. Since there's a good chance you already have an installment account in your name, now you just need to focus on paying it off within the window of time specified. Do this by making sure your set monthly payments are made in full and on time when due.

For those who are new to credit cards, consider opening one to have some form of revolving credit and use it wisely — only charge what you know you can pay off in full by the due date. This way, you never have to pay interest on a revolving balance.

Credit card beginners should start with cards that are geared toward building credit. For example, the Capital One® Secured has no annual fee and varying minimum security deposits of $49, $99 or $200 — based on your creditworthiness.

Most secured credit cards require a deposit upfront that is equal to your credit limit (usually $200), but qualifying cardholders of the Capital One Secured can still access a $200 credit limit while only depositing $49 or $99. In addition to lower security deposits, Capital One gives cardholders access to a higher credit limit after making their first five monthly payments on time.

Capital One® Secured Mastercard®

Capital One® Secured Mastercard®
Information about the Capital One® Secured Mastercard® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.
  • Rewards

    This card doesn't offer cash back, points or miles

  • Welcome bonus

    No current offer

  • Annual fee

    $0

  • Intro APR

    N/A for purchases and balance transfers

  • Regular APR

    26.99% variable on purchases and balance transfers

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    No credit history

See our methodology, terms apply.

Pros

  • No annual fee
  • $49, $99 or $200 refundable deposit
  • Get access to a higher credit line after making your first five monthly payments on time
  • No fee charged on purchases made outside the U.S.
  • Flexibility to change your payment due date

Cons

  • High 26.99% variable APR
  • No rewards program
  • After you apply and submit your deposit, it takes 2-3 weeks to get your card
  • Capital One periodically reviews your account to see if you can be transitioned to an unsecured card, but unlike the Discover it® Secured Card there’s no clear timeline for when this will occur

For those looking to open a revolving credit account and have only an average credit score, consider the Capital One® Platinum Credit Card. This card is open to applicants with less-than-stellar credit and comes with no annual fee nor foreign transaction fees for those traveling outside the U.S.

Capital One® Platinum Credit Card

Capital One® Platinum Credit Card
Information about the Capital One® Platinum Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Rewards

    None

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    None

  • Regular APR

    26.99% variable

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    Good/Fair

See our methodology, terms apply.

Pros

  • No annual fee
  • No fee charged on purchases made outside the U.S.
  • Travel benefits, such as travel accident insurance, auto rental collision damage waiver and roadside assistance
  • Access a higher credit limit after making your first five monthly payments on time

Cons

  • 26.99% variable APR
  • No rewards program

Bottom line

Making timely payments on all your credit accounts, no matter if it's installment or revolving, is important if you want to be rewarded for having a mix of both. Having both revolving and installment accounts in your name gives you a good variety, shows you can handle multiple loan types and also boosts your credit score. It may not be the biggest factor, but your credit mix counts for 10% of your FICO credit score.

Information about the Capital One® cards has been collected independently by CNBC and has not been reviewed or provided by the issuer prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.