Your Credit Mix and Installment Loans

If you were unaware your credit mix makes up 10% of your credit score.  This part of your credit score looks at what types of credit you are using.  So are you using credit cards?  Do you have a mortgage?  Do you have an auto loan?

There are no stated rules of what a healthy mix of credit is.  But it is often put that you should just have credit cards.  So having 12 different credit cards is not recommended.  It is much better to use many different types of credit.  It shows you have the ability to manage different types of credit. 

So why do you turn to diversify your credit.  One new and unknown way is to get a peer to peer loan.  This is same as person to person lending.  There is less bank involvement and usually has the job of connecting investors with lenders. 

Why get one?  Well one of the most popular uses is to consolidate debt.  You can get a peer to peer loan that ranges from $1000 to $25000.  This makes ideal to pay off those credit cards.  Also, you get a loan that is usually at a much better interest rate.  It is a three year loan and by the time you pay it off you could be potentially be out from under that credit card debt.  

But if you don't think that is for you, peer to peer lending can be an alternative to a traditional auto loan.  Who likes dealing with a car finance department.  This way you can have the money you want to spend up from and try to negotiate a better deal.  

Well, this is one way to work on your credit mix, but you should also not apply for credit if you don't need it.  You need to see if peer to peer lending will work for you.