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Regular Contributor
boober
Posts: 136
Registered: ‎02-18-2013

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

When lenders try and figure out someone's DTI, and that certain someone they're looking at has say $6000 in CC debt, would it look better if all that was on 1 card or say spread out over 5 cards?

Frequent Contributor
Kozmo
Posts: 318
Registered: ‎07-08-2012

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

DTI factors in monthly payments not the total balance.

Regular Contributor
boober
Posts: 136
Registered: ‎02-18-2013

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

[ Edited ]

Thanks for the reply.

 

I know it's for monthly payments and not total balance.

 

But if they look up your credit, and see $6000 in total CC debt, which looks better for your monthly payments?

 

I guess maybe I should have specified this was in regards to a HARP refi.

 

When they don't know the monthly payment, and they try and figure it out, or let's say the DU software tries to guesstimate the monthly payments, which is better, all $6000 on 1 CC, or spread it out over 5 CC's?

 

Say if you have a total of 20,000 CL's over the 5 CC's.

 

I mean if it's all on 1 card, well then your payment could easily be $300 a month.

 

But if you have it over 5 cards, well then the payment could easily be only $30 a month. So in reality that seems like it would look better since the payments are smaller and less.

 

So which looks better to the lender?

Frequent Contributor
js0319
Posts: 304
Registered: ‎02-27-2012

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

It's all going to depend on whether your monthly payments (for the same balance in total) are less spread out or on one card.

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Regular Contributor
boober
Posts: 136
Registered: ‎02-18-2013

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

[ Edited ]

Thanks for the reply.

 

So which would be better, or which would look better to the lender?  Transfer all the balances onto 1 card?

 

Or leave em spread out?

Valued Contributor
Mike_B03
Posts: 1,118
Registered: ‎11-30-2012

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

Well it depends. How much is the minimal payment on one card with the total balance and what is the total of all minimum payments if the total balance is spread out over multipile cards. Which ever is less is the one that looks better.
Regular Contributor
boober
Posts: 136
Registered: ‎02-18-2013

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

Well when getting quotes from lenders for a HARP refi, I've been told my DTI is too high. I call them up and give em my personal info.

 

Then when they look up my credit report and see my CC balances, that's when I get turned down.

 

So I'm trying to pay it down within the next 6 months or so.

 

But in 6 months I'm going to have maybe $6000 in debt left. So that's why I'm wondering which is better. All on 1 card? Or spread out?

 

So since all they have to go by is my CC balances, how in the hell can they tell what my minimum payment is just by looking at a CC balance?

 

Doesn't make sense.

Valued Contributor
Mike_B03
Posts: 1,118
Registered: ‎11-30-2012

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

What do you mean all they have to go by is your CC balances? When they pull your credit report, it shows what you monthly minimum payment for each card is.
Regular Contributor
boober
Posts: 136
Registered: ‎02-18-2013

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

[ Edited ]

That's interesting!

 

That i didn't know!

 

I just assumed it dodn't show them my monthly payments since when I look at my credit reports all I see is my balance for each card.

 

Thanks for the reply.

 

 

EDIT : I'll be damned!

 

If you look at your report and dig a little deeper it does show your monthly payment amount! HOLY CRAP! :smileysurprised:

Frequent Contributor
Kozmo
Posts: 318
Registered: ‎07-08-2012

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

The reports should have the payments so long as an account has a balance

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