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When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

Valued Contributor

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

The report lenders pull is called a tri-merge credit report and has all three bureaus on one long report. On this, itll show your total balance, the credit card limit, the high limit (which is the most youve ever used, and they can see if youve ever over charged past your credit limit) and also the minimum payment for each card. Usually minimum payments are not that big, but of course it depends on the balance. For me, my credit card that has like $400 on it has a $15 minimum payment. Had a card that had a $2000 balance that had a $90 minimum but its been paid off.
Member

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

If you have the limits to support it, balance transfer the total amount of debt to one card with a 0% BT promo(normally there is a 3-5% fee, but this would be worth it in your case).  I know Citi and Barclays only reports 1% of the statement balance as the minimum payment on your credit reports.  I have never attempted a BT on any of my other cards, but if you have a $6000 balance your minimum payment would only be $60 with Citi or Barclays.  The kicker, make sure you pay it off BEFORE the promotional rate expires!

Frequent Contributor

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

That's awesome Benjiiii thanks for sharing that. Smiley Very Happy

Frequent Contributor

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

So you could have a really high CC usage, but if you happen to have really low payments on your credit report, that's all they care about? The monthly payments?

 

And not the total debt?

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Valued Contributor

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

It typically looks better if the $6000 is spread out across several cards UNLESS it is loaded on a $20K limit card as you don't want to show any maxed out cards. Maxed out is at 90%. Hope this helps.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Frequent Contributor

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

That helps!

 

Thanks everyone who replied. Smiley Very Happy

Established Contributor

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

It may also be worth noting that spreading it out on multiple cards will lower your FICO score.  Number of CC accounts carrying a balance is a factor.


My Starting Score: EQ: 691 (11/30/11) TU98: 726 (11/30/11)
My Current Score: EQ: 779 (04/22/13) TU08: 835 (06/03/13)
DW Starting Score: EQ: 742 (03/02/12) TU98: 748 (03/02/12)
DW Current Score: EQ: 784 (03/11/13) TU08: 775 (06/03/13)
Member

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

Exactly what Pakman said - it'll be much more beneficial to keep it on one card, and NOT spread out.  

 

In my situation, both my Citi TYP and Barclays Apple Visa have 20k limits, so a 5k BT won't hurt utilization too bad(total CC limits are around 110k).  Boober - even if you had a 10k limit card(in addition to others), I would do this to help out your DTI for the house.

Frequent Contributor

Re: When figuring out DTI, better all on 1 CC or spread out over 5 CC's?

I keep my high balance on one card and keep the others at zero come report time.  I think it's easier and looks nicer on paper to have just the one payment rather than a bunch of payments across multiple cards with different minimums.  But I have noticed with my NFCU cashRewards card if you make another payment after the due date and before the statement cuts, the minimum monthly payment will be $0 (even with a balance).

 

In that case, I don't know how they calculate it.

2011: EQ 580~
2012: EQ 620~
2013: EQ 641, TU98 645, TU04 635, TU08 635, EX 648 (lender)
Closed on first home 4/25/13.