Credit card apps and DTI

[HappyBuilder42]

When applying for cards, I believe credit card companies take DTI into consideration, but how do they obtain the info? Besides asking about income and housing costs in the app, do they also look at credit reports to find debt/mortgage payment amounts?

I got a new mortgage in November, but my old mortgage is still reporting as open in EX(only). On my credit report it would look like I am paying two mortgages - which would blow up my DTI.

Specifically, I might app for BOA CBR and was also thinking of asking for a CLI on an AMEX BCE I got in December.

[Horseshoez]

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@HappyBuilder42 wrote:

When applying for cards, I believe credit card companies take DTI into consideration, but how do they obtain the info? Besides asking about income and housing costs in the app, do they also look at credit reports to find debt/mortgage payment amounts?

I got a new mortgage in November, but my old mortgage is still reporting as open in EX(only). On my credit report it would look like I am paying two mortgages - which would blow up my DTI.

Specifically, I might app for BOA CBR and was also thinking of asking for a CLI on an AMEX BCE I got in December.

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I believe there is a formula they use based upon credit report data which allows them to make a reasonably accurate guesstimate of what your monthly spend is.  Given your old mortgage is still reporting on Experian, and given BofA uses Experian (or at least did when I applied in March of 2020), I strongly recommend you wait until your old mortgage drops off.

[SouthJamaica]

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@HappyBuilder42 wrote:

When applying for cards, I believe credit card companies take DTI into consideration, but how do they obtain the info? Besides asking about income and housing costs in the app, do they also look at credit reports to find debt/mortgage payment amounts?

I got a new mortgage in November, but my old mortgage is still reporting as open in EX(only). On my credit report it would look like I am paying two mortgages - which would blow up my DTI.

Specifically, I might app for BOA CBR and was also thinking of asking for a CLI on an AMEX BCE I got in December.

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My hunch, based on my review of the information available at experian.com, is that what they do is sort of a simplified version: 

They add up the minimum monthly payments of your revolving and installment debts in the report and then divide that by your income.

I'm not sure where they get the income from, but I guess it's from when you updated your income in a credit application or credit limit increase application.

[HappyBuilder42]

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@Horseshoez wrote:

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@HappyBuilder42 wrote:

When applying for cards, I believe credit card companies take DTI into consideration, but how do they obtain the info? Besides asking about income and housing costs in the app, do they also look at credit reports to find debt/mortgage payment amounts?

I got a new mortgage in November, but my old mortgage is still reporting as open in EX(only). On my credit report it would look like I am paying two mortgages - which would blow up my DTI.

Specifically, I might app for BOA CBR and was also thinking of asking for a CLI on an AMEX BCE I got in December.

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I believe there is a formula they use based upon credit report data which allows them to make a reasonably accurate guesstimate of what your monthly spend is.  Given your old mortgage is still reporting on Experian, and given BofA uses Experian (or at least did when I applied in March of 2020), I strongly recommend you wait until your old mortgage drops off.

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Thanks. I'll definitely hang loose until EX shows the old mortgage as closed. Not sure what is taking so long though. TU and EQ updated in early March. I guess it's a subject for another post.

[Anonymous]

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@HappyBuilder42 wrote:

When applying for cards, I believe credit card companies take DTI into consideration, but how do they obtain the info? Besides asking about income and housing costs in the app, do they also look at credit reports to find debt/mortgage payment amounts?

I got a new mortgage in November, but my old mortgage is still reporting as open in EX(only). On my credit report it would look like I am paying two mortgages - which would blow up my DTI.

Specifically, I might app for BOA CBR and was also thinking of asking for a CLI on an AMEX BCE I got in December.

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They ask for all income you receive and then look at the reporting balances on your credit report to calculate DTI.   So if you still have an old mortgage and want to apply for something I would suggest you wait for it to show as closed.

[HappyBuilder42]

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@Anonymous wrote:

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@HappyBuilder42 wrote:

When applying for cards, I believe credit card companies take DTI into consideration, but how do they obtain the info? Besides asking about income and housing costs in the app, do they also look at credit reports to find debt/mortgage payment amounts?

I got a new mortgage in November, but my old mortgage is still reporting as open in EX(only). On my credit report it would look like I am paying two mortgages - which would blow up my DTI.

Specifically, I might app for BOA CBR and was also thinking of asking for a CLI on an AMEX BCE I got in December.

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They ask for all income you receive and then look at the reporting balances on your credit report to calculate DTI.   So if you still have an old mortgage and want to apply for something I would suggest you wait for it to show as closed.

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I called the mortgage servicer on the old mortgage on Saturday and let them know that it was still reporting as open on my EX. As of this morning, it is now showing as closed. I lost 18 points(went from 91.5% to 99.7% util on real estate loans), but that's fine - I'd rather lenders not think I'm paying two mortgages on my current salary. Hopefully l'll get some of those points back after Navy CR reports and I'm AZEO. Will be going from 13% to 1% on my revolvers.