Small but Important
The last category, weighing in at a reported 10% contribution to your scores relates to the type of credit which appears on your credit report. This is a small category, but one which often takes people by surprise.
Credit Repair Caution
All credit is not equal in the eyes of FICO. If you want the best possible results from your credit repair effort you must be very selective. It is not enough to open accounts and pay your bills on time. The type of credit you utilize can either assist or thwart your effort to improve your scores.
The FICO Bias
FICO has a bias against consumer credit including store cards, retail accounts, and the type of financing typically offered by furniture, appliance, and electronics stores. This type of debt is will provide less of a benefit to your score when well managed, and more damage if there is a problem.
The Right Accounts for Credit Repair
For building credit, we advise our credit repair clients to stick with mainstream credit cards like MasterCard, Visa, American Express, and Discover, and to avoid store cards and consumer financing.
Adding Installment Accounts
In addition, a balanced mix of accounts can be a benefit to your scores. You can obtain excellent credit scores with well managed revolving accounts alone, but the presence of an automobile loan and/or a mortgage is capable of adding points. Keep in mind that installment loans, like automobile and mortgage loans, are subject to the same conditions as all other accounts and must have history before delivering higher scores.