New Delhi, July 1 -- A personal loan is seen as a panacea for sudden financial crisis. It could stem from an emergency or home renovation, higher education or a wedding.

Aside from meeting one or more of these financial needs, a personal loan also helps the borrower create a healthy credit mix which is a blend of different credit options. These include credit card, home loan, car loan and personal loan. But why is this important?

Credit mix refers to the blend of different types of credit accounts that you have on your credit report. It is one of the factors that credit scoring models consider at the time of calculating credit score.

Typically having a blend of revolving and instalment accounts is considered positively. For instance, k...