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Quick question. When I pull my credit report, my DTI ratio shows to be extremely high (in the 90% range) and I know it's due to my limited credit history and account types. Here is a quick run down of my credit situation:
Mortgage: None
Installment: 1 account (student loan)
Revolving: 1 department store card, 2 share-secured visa cards for credit re-building purposes
No judgments, liens, unpaid collections.
I've been struggling for the past year to rebuild my credit and not really having much luck. I know that my limited account type/credit history is a lot of my problem. I'm hoping to buy my first home sometime by the end of this year and wonder if my high DTI ratio due to my student loan installment account will hold me up. (Since being consolidated, the packets I have paid off are not reflected, only the unpaid amount, so it shows a balance of about $8200 owed out of a total limit of $8600).
Any advice is greatly appreciated!
Where are you getting the information that states your DTI is in 90% range?
I also subscribe to the Scorewatch monthly service through Equifax. I know this doesn't give me my true FICO score, but I like to see what all is on my credit each month and it updates me when things report each month (credit card payments, etc) and alerts me when my score changes. It gives you a breakdown based upon all your accounts what your DTI ratio is and lists what accounts you have by type, balance, etc. Just a supplemental tool I use along with myFICO.
Just for some clarification. DTI (debt to income) ratio is not displayed on your credit report. What you are thinking about is credit utilization. This is the amount of credit you have used in comparison to the amount of credit you have available. For example, if you have a $1000 limit credit card, and you have a $900 balance on that credit card, then you have a 90% credit utilization ratio (which is not good).
Normally installment loans are not counted in the credit utilization ratio. Do you have any credit cards that are near their limit or maxed out? If so, you should try to get these paid down as quickly as you can. Try to get to a utilization ratio of between 1% and 9%.
Now, let us go back to the DTI. If you are trying to get a mortgage (or any other installment loan), they do look at your DTI. That is the amount of income you having coming in, verses the amount that you have to pay out each month for bills. Your student loan will be considered in your DTI and will affect your ability to get a mortgage. Hope this clarifies the differences that you may be thinking of. A decrease of your DTI will not necessarily result in a higher credit score.
A decrease in your credit utilization (if you are at 90%) would most likely result in a higher credit score.
@RW771 wrote:I also subscribe to the Scorewatch monthly service through Equifax. I know this doesn't give me my true FICO score, but I like to see what all is on my credit each month and it updates me when things report each month (credit card payments, etc) and alerts me when my score changes. It gives you a breakdown based upon all your accounts what your DTI ratio is and lists what accounts you have by type, balance, etc. Just a supplemental tool I use along with myFICO.
WAIT JUST ONE MINUTE. I thought SW through EQ was a FICO? It says it's a FICO. It even has the little copyright circle. ?????
@Booner72 wrote:
@RW771 wrote:I also subscribe to the Scorewatch monthly service through Equifax. I know this doesn't give me my true FICO score, but I like to see what all is on my credit each month and it updates me when things report each month (credit card payments, etc) and alerts me when my score changes. It gives you a breakdown based upon all your accounts what your DTI ratio is and lists what accounts you have by type, balance, etc. Just a supplemental tool I use along with myFICO.
WAIT JUST ONE MINUTE. I thought SW through EQ was a FICO? It says it's a FICO. It even has the little copyright circle. ?????
The SW through the Equifax website is exactly the same product as what is sold here.
From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782
"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".