Variety of Credit Types

It is important to keep a variety of credit types. For example, if you need a new refrigerator, you are faced with two options (among many). You can get a new credit card and pay for the refrigerator with that, or you can take out an installment loan directly with the retailer. Say you already have three credit cards. It would be better for you to take out the installment loan (all other factors being equal), as it adds variety to your credit portfolio. Additionally, if you have several credit cards open, close a few; you only need one or two. However, don’t close your oldest one, as will be discussed next.