Does Student Loans Affect Approval% For CCs?

[CEOriginal]

I'm wondering if your history with your student loan lender will affect how CC lenders view you? 

Do they factor into the debt-to-income ratio? Or do CC companies not care much about that? 

If you've been late (not defaulted, just 30-, 60-, or 90- day lates), is that viewed unfavorably or is it ignored because they're student loans?

MODS: I didn't know which forum to post this. If it's best served somewhere else, feel free to move!

[Anonymous]

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@CEOriginal wrote:

I'm wondering if your history with your student loan lender will affect how CC lenders view you? Installment loans don't help as much, but any kind of positive history is good, and still contribute.

Do they factor into the debt-to-income ratio? Yes Or do CC companies not care much about that? They care. 

If you've been late (not defaulted, just 30-, 60-, or 90- day lates), is that viewed unfavorably or is it ignored because they're student loans? Any kind of lates or negatives on installment accounts are as serious as any lates or equivalent on revolving accounts

MODS: I didn't know which forum to post this. If it's best served somewhere else, feel free to move!

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Answered in red.

Basically, you want to avoid any derogs in general. As long as it reports to the CRAs, you will be dinged as hard regardless of the account type that you are late on.

[CEOriginal]

Hmmm thanks for the info. I've seen conflicting answers regarding the debt to income ratio, but more have gone towards the "yes" side. 

[Anonymous]

Nvm thought u were asking something else originally.

Lenders do care about your DTI. It's an indicator how well you are managing your debt level.

[Revelate]

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@CEOriginal wrote:

Hmmm thanks for the info. I've seen conflicting answers regarding the debt to income ratio, but more have gone towards the "yes" side. 

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It's safe to say anything which can be found or determined through a credit report is fair game from an underwriting perspective.

DTI absolutely gets used for virtually every credit or loan application of any type; lenders include that in their underwriting decision as it directly effects the risk calculations for a given consumer, and credit cards are no exception.  Well one possible exception *might* be secured cards, but I suspect it's done there as well for fraud check purposes if nothing else.

Out of curiosity, where have you seen different posted?

[CEOriginal]

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@Revelate wrote:

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@CEOriginal wrote:

Hmmm thanks for the info. I've seen conflicting answers regarding the debt to income ratio, but more have gone towards the "yes" side. 

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It's safe to say anything which can be found or determined through a credit report is fair game from an underwriting perspective.

DTI absolutely gets used for virtually every credit or loan application of any type; lenders include that in their underwriting decision as it directly effects the risk calculations for a given consumer, and credit cards are no exception.  Well one possible exception *might* be secured cards, but I suspect it's done there as well for fraud check purposes if nothing else.

Out of curiosity, where have you seen different posted?

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Another forum specifically for grad students. Since I'll be starting my Masters this fall, I asked the question there thinking I'd get a clear, concise, and educated answer. I thought wrong lol

[crunching_numbers]

CEOriginal-
People on a Grad student forum are probably well versed in student aid, thesis preparation, housing options, balancing work and school, etc. Most are fairly young, and relatively new to credit. We have a few credit junkies here on the forums that are young and knowledgeable, but the average grad student has limited exposure to credit issues.
On the other hand, this forum is full of people with credit issues, history , and experience (both good and bad). The answer you get here will be read by and approved by multiple credit junkies. Just like in research, you need to consider the source. If the answers seem to conflict, evaluate the possible reasons.

BTW- a 30d late on a student loan is just as harming to an approval as a 30d late on a CC. Both send the same message- "I have a history of not being responsible with my credit". FICO will punish you equally for both. DTI clearly plays a greater role in obtaining a mortgage, but CC companies are asking for your income for a reason. They are evaluating your ability to pay. Ability to pay equates to DTI.

[jla84]

Just from my experience, I have almost $100,000 in student loan debt and a relatively (for the amount of my student loan debt) low-paying job and I haven't had any trouble getting CCs and have several cards above 5K. However, I've never been late on my student loans, so I cannot speak to that but I'd expect that they look negatively on late payments on any portion of your CR. 

[crunching_numbers]

Jla84-
It is not as much the total amount you owe that comes into play as the minimum monthly payment on those loans. When DTI is calculated, they look at what all of your minimum monthly payments add up to. There is a big difference in the payment on $100k over 5 years and $100k over 30 years.

[Anonymous]

Was just denied a CLI from Amex solely because of DTI (student loan) reasons, so I would imagine it's a very real consideration.