I have 3 credit cards currently, no auto loan and a mortgage. According to Credit Karma, the advice is I need to have more accounts open to boost my credit rating. Is this true?
In my case it sounds like I need to open up at least one retail account since I have none at all. This yields a F rating from Credit Karma for my # of accounts.
Basically Credit Karma says "Having a healthy account type mix tells lenders that you are able to handle different kinds of credit and can be beneficial to your credit health. Real estate loans are of the highest credit quality, followed by installment loans, credit cards, and retail cards in order of declining quality. You should aim to keep a mixture of all of these account types on your credit report, with a focus on those of higher quality."
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Official comment
You don’t need to open different types of credit lines just to improve your credit rating.
The number of lines and the types of lines are important, but they won’t make or break your life instantly.
Adding a variety of lines is definitely helpful. As you increase your income and build up credit over time, you can get different types of credit over time. CreditKarma’s advice is pretty generic and doesn’t take into account your goals, income, and obligations.
If you continue to make payments on your current credit products and have a good credit utilization, your credit score will continue to increase.
This is directly from their blog - Types of Credit - Implications for Your Credit Score
As their expert says - “It's important to only open new accounts when you can afford them (a derogatory mark will likely do more damage than a lack of variety, after all). Still, if your report is stuffed full of credit cards and you need a new source of credit, choosing a loan instead of a credit card might be a good move next time you're in need of a new line of credit.”
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