Credit Variance

10% of your FICO score

Credit variance is the variety of debt you have reporting on your credit report.  Balance is of the utmost importance.  The FICO score penalizes you for being too heavily indebted into only one type of debt.  They like to see a mix of different installment loans (mortgage, auto, personal loans, student loans) and revolving credit (credit cards, lines of credit, HELOCs).  In order to optimize your FICO score it is imperative that you have at least 2 different installment loans and have at least 3 different revolving credit items.  Having one mortgage, one auto loan, one personal loan, and 3-4 different credit cards is ideal.  A CreditFirm.net consultant can help you find the right balance.