[quote=HLS]Approvals don’t care about how much debt you have, they only look at minimum monthly payments on a credit report.
Many people are not aware that they can raise their credit scores relatively easily & quickly.
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It’s kind of scary how easy it is to manipulate the numbers if you plan ahead. For example, most student loans offer a variety of payback plans. One option is graduated repayment, where payments go up with time, under the assumption income will improve. So even if the payment will be more like $200/mo over the life of a mortgage, it can look like $100/mo to the lender if that’s your current monthly minimum.
Shuffling credit card debt onto 0% interest cards also lowers the minimum monthly payment, since most CC’s use a variant of Interest Accrued During Billing Cycle + X% of account balance. Of course shuffling debt can negatively impact a credit score in the short run.
The way income is counted is weird and somewhat frustraing as well. In particular it’s annoying that “contract” work isn’t counted, even if it’s a 6 month contract that has been renewed every time for the last couple of years. Considering California is an At Will employment state, to me it would make more sense to look at income history rather than current employment status and salary.
It’s a messy system that can be manipulated, but brokers legally aren’t supposed to coach you through how to pull some of the levers.
