As a consumer, understanding the factors that go into your credit score is critical to ensuring your score is accurate. However, one question many have about their score revolves around their credit mix. If you’re unsure what this is or how it’s determined, the following blog explores what you should know. You’ll also discover why working with an inaccurate account information disputes lawyer is in your best interest if you discover errors in your report.
What Is a Credit Mix?
Your credit mix is a factor that makes up your credit score. This is representative of the different kinds of credit you have at any given time. There are two kinds of credit you can have at any given time. The first is installment credit, which is representative of a lump-sum amount, typically paid in monthly installments, like mortgages or auto loans. The next kind of credit that is factored in are credit lines. These represent a credit line extended to consumers which places a limit on spending. As you pay off the amount owed, the credit line frees up. Examples of this include credit cards or personal credit lines.
It’s important to understand that your credit mix only makes up about 10% of your score. Because this is a small amount, it’s generally not recommended to open new lines of credit specifically in the hopes of improving your credit score. The best way to improve your credit mix is naturally, over the course of your life as a consumer.
What Should I Do if I Find Errors on My Credit Report?
Understanding the different factors that determine your credit score is critical to ensure you can identify potential issues as soon as possible. However, if you discover an error on your credit report, understanding the next steps to take is critical. Unfortunately, errors on your credit report can be incredibly impactful, as they an cause your credit score to drop which can lead to the denial of loans or increased interest rates.
If you discover an error on your credit report, taking the appropriate steps to remedy the issue is critical. Generally, the first thing you should do is print out a hard copy of your credit report and highlight the error. You should then write an informative letter explaining the nature of the error and include any documentation that can help show that it is an error. It’s in your best interest to mail the letter through certified mail so you can be sure the reporting agency received your dispute.
Discovering an error on your credit report can be incredibly frustrating. That’s why the dedicated team at Loker Law, APC is ready to assist you through these difficult times. Our firm understands that these mistakes can have a serious impact on your financial future, which is why we will do everything in our power to help you get the results you deserve. Contact us today to learn how we can assist you.
