What does it mean to have a healthy credit mix?

Having a healthy credit mix refers to possessing a variety of credit accounts that demonstrate your ability to manage different types of credit responsibly. This typically includes a combination of revolving credit accounts (such as credit cards), installment loans (like auto loans or mortgages), and possibly other forms of credit, such as retail accounts or personal loans.

Lenders and credit scoring models often view a diverse credit mix positively because it suggests that you can handle various types of debt, which may enhance your creditworthiness. A well-rounded credit profile can indicate to lenders that you are experienced with managing credit obligations, leading to better credit scores and increased chances of loan approval.

On the other hand, solely having a single type of credit or too few accounts can hinder your credit history depth, which might negatively impact your credit score. This is why it's advantageous to strive for a healthy mix of different credit types rather than limit credit usage to one type or only engage with one kind of account.