Credit card planning before getting a loan

[Aecetia]

This will give you an idea where you stand and you could answer the questions different ways to see what the effect is on your overall score by adding credit cards and increasing debt parameters.

http://www.bankrate.com/brm/fico/calc.asp

[Daniel]

To answer your specific question: high balances (like your $10K) do hurt. Not a lot, and it depends on other factors, but they do. There is nothing in your credit report that tells FICO that you are paying in full every month. So, as far as FICO is concerned, your pattern of charging $10K every month and paying it in full looks no different than having charged $10K long time ago and now struggling with a minimum payment every month. Again, it’s no big deal (maybe 10-20 FICO points or so), but, if those points make a difference to you, you’d be better off keeping lower balances and using your debit cards more often.

[Daniel]

To answer your specific question: high balances (like your $10K) do hurt. Not a lot, and it depends on other factors, but they do. There is nothing in your credit report that tells FICO that you are paying in full every month. So, as far as FICO is concerned, your pattern of charging $10K every month and paying it in full looks no different than having charged $10K long time ago and now struggling with a minimum payment every month. Again, it’s no big deal (maybe 10-20 FICO points or so), but, if those points make a difference to you, you’d be better off keeping lower balances and using your debit cards more often.

[Daniel]

To answer your specific question: high balances (like your $10K) do hurt. Not a lot, and it depends on other factors, but they do. There is nothing in your credit report that tells FICO that you are paying in full every month. So, as far as FICO is concerned, your pattern of charging $10K every month and paying it in full looks no different than having charged $10K long time ago and now struggling with a minimum payment every month. Again, it’s no big deal (maybe 10-20 FICO points or so), but, if those points make a difference to you, you’d be better off keeping lower balances and using your debit cards more often.

[Daniel]

To answer your specific question: high balances (like your $10K) do hurt. Not a lot, and it depends on other factors, but they do. There is nothing in your credit report that tells FICO that you are paying in full every month. So, as far as FICO is concerned, your pattern of charging $10K every month and paying it in full looks no different than having charged $10K long time ago and now struggling with a minimum payment every month. Again, it’s no big deal (maybe 10-20 FICO points or so), but, if those points make a difference to you, you’d be better off keeping lower balances and using your debit cards more often.

[Daniel]

To answer your specific question: high balances (like your $10K) do hurt. Not a lot, and it depends on other factors, but they do. There is nothing in your credit report that tells FICO that you are paying in full every month. So, as far as FICO is concerned, your pattern of charging $10K every month and paying it in full looks no different than having charged $10K long time ago and now struggling with a minimum payment every month. Again, it’s no big deal (maybe 10-20 FICO points or so), but, if those points make a difference to you, you’d be better off keeping lower balances and using your debit cards more often.

[joec]

Thanks for everyone’s quick answers.

I suppose my concern stems more specifically on:
Would the 10k be considered “debt” in the debt/income ratio calculation?

My FICO is around 800 and total usable credit probably 20% so maybe 50k in credit available.

I just didn’t want to shop for a loan and be rejected since they see 10k on a credit card in my report for that month and that’d be way off the 26/38 debt/income ratios.

[joec]

Thanks for everyone’s quick answers.

I suppose my concern stems more specifically on:
Would the 10k be considered “debt” in the debt/income ratio calculation?

My FICO is around 800 and total usable credit probably 20% so maybe 50k in credit available.

I just didn’t want to shop for a loan and be rejected since they see 10k on a credit card in my report for that month and that’d be way off the 26/38 debt/income ratios.

[joec]

Thanks for everyone’s quick answers.

I suppose my concern stems more specifically on:
Would the 10k be considered “debt” in the debt/income ratio calculation?

My FICO is around 800 and total usable credit probably 20% so maybe 50k in credit available.

I just didn’t want to shop for a loan and be rejected since they see 10k on a credit card in my report for that month and that’d be way off the 26/38 debt/income ratios.

[joec]

Thanks for everyone’s quick answers.

I suppose my concern stems more specifically on:
Would the 10k be considered “debt” in the debt/income ratio calculation?

My FICO is around 800 and total usable credit probably 20% so maybe 50k in credit available.

I just didn’t want to shop for a loan and be rejected since they see 10k on a credit card in my report for that month and that’d be way off the 26/38 debt/income ratios.

[joec]

Thanks for everyone’s quick answers.

I suppose my concern stems more specifically on:
Would the 10k be considered “debt” in the debt/income ratio calculation?

My FICO is around 800 and total usable credit probably 20% so maybe 50k in credit available.

I just didn’t want to shop for a loan and be rejected since they see 10k on a credit card in my report for that month and that’d be way off the 26/38 debt/income ratios.

[Raybyrnes]

Since your are not expected to pay the bill in full you would not be hit with the full 10K in the debt to income rations . My understanding of CC is that you would be required to pay 2% of the 10K or about 200 that would get factored into your monthly ratio’s.

What typically hurts is if the credit line were 10K and you were using the full 10K, this would then show up as 100% usae which would reflect a high amount of risk and lower the credit score. If you ahve 50 K of credit and you are using 10K it is only reflecting 20% which is very conservative and considered normal. This is why you ahve a vry good credit score.

Best be is to simply order a copy of your credit score before searching for credit.

[Raybyrnes]

Since your are not expected to pay the bill in full you would not be hit with the full 10K in the debt to income rations . My understanding of CC is that you would be required to pay 2% of the 10K or about 200 that would get factored into your monthly ratio’s.

What typically hurts is if the credit line were 10K and you were using the full 10K, this would then show up as 100% usae which would reflect a high amount of risk and lower the credit score. If you ahve 50 K of credit and you are using 10K it is only reflecting 20% which is very conservative and considered normal. This is why you ahve a vry good credit score.

Best be is to simply order a copy of your credit score before searching for credit.

[Raybyrnes]

Since your are not expected to pay the bill in full you would not be hit with the full 10K in the debt to income rations . My understanding of CC is that you would be required to pay 2% of the 10K or about 200 that would get factored into your monthly ratio’s.

What typically hurts is if the credit line were 10K and you were using the full 10K, this would then show up as 100% usae which would reflect a high amount of risk and lower the credit score. If you ahve 50 K of credit and you are using 10K it is only reflecting 20% which is very conservative and considered normal. This is why you ahve a vry good credit score.

Best be is to simply order a copy of your credit score before searching for credit.

[Raybyrnes]

Since your are not expected to pay the bill in full you would not be hit with the full 10K in the debt to income rations . My understanding of CC is that you would be required to pay 2% of the 10K or about 200 that would get factored into your monthly ratio’s.

What typically hurts is if the credit line were 10K and you were using the full 10K, this would then show up as 100% usae which would reflect a high amount of risk and lower the credit score. If you ahve 50 K of credit and you are using 10K it is only reflecting 20% which is very conservative and considered normal. This is why you ahve a vry good credit score.

Best be is to simply order a copy of your credit score before searching for credit.

[Author]

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