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Total Credit Limit versus Income ?

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Super Contributor

Re: Total Credit Limit versus Income ?

I'll look later, but my total credit lines are probably around five times my annual income.

 

DW might be at six or seven times her annual income.

 

Conservative credit unions frown at us, but big box banks don't seem to mind...



09/25/20 Mortgage scores: EX2 712, EQ5 710, TU4 no idea.
10/01/20 Fico 8: EX 709, EQ 722, TU 737.
10/03/20 Fico 9: EX 708, EQ 700, TU no idea...

Zero percent financing is where the devil lives...
Sitting in the garden behaving myself. #noinqs2020
Message 11 of 54
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Senior Contributor

Re: Total Credit Limit versus Income ?


@tcbofade wrote:

Conservative credit unions frown at us

 

 

 

My CU is conservative.   I hope they don't frown at us when the time comes. 

”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 12 of 54
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Community Leader
Super Contributor

Re: Total Credit Limit versus Income ?

IDK but I'm actually a teensy bit above 2:1 ratio but not by design. I really just focus on having the UT padding for when I do want to make a larger than usual spend.

 

And, personally, I feel quite comfortable at this ratio now that I've taken the time to think about it, which I never have before.

 

Thanks GApeachy for asking the question. It gave me pause for thought. 


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799

|| AmX Cash Magnet $40.5K || NFCU CashRewards $30K || Discover IT $24.7K || Macy's $20K || NFCU CLOC $15K || CitiCostco $12.7K || NFCU Platinum $12.5K || Apple Card $6.5K ||
Message 13 of 54
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Senior Contributor

Re: Total Credit Limit versus Income ?


@CreditInspired 

Combined dh and I are 2:1 or a hair above.  Don't know if CU/banks look at it that way or not.  If they don't that's great!  (eta: a few months back I have trimmed the fat thinking that was a good thing; plus it made life easier.)

”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 14 of 54
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Super Contributor

Re: Total Credit Limit versus Income ?

None of you are wrong, I am not yet ready to trim the fat... still need the utilization padding as we pay off debt with the help of the zero percent balance transfer shuffle...

 

Current overall credit lines are 7.6 times my annual income.

DW overall lines are 6.9 times her annual income.

 

 



09/25/20 Mortgage scores: EX2 712, EQ5 710, TU4 no idea.
10/01/20 Fico 8: EX 709, EQ 722, TU 737.
10/03/20 Fico 9: EX 708, EQ 700, TU no idea...

Zero percent financing is where the devil lives...
Sitting in the garden behaving myself. #noinqs2020
Message 15 of 54
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Senior Contributor

Re: Total Credit Limit versus Income ?


@CreditInspired wrote:

Thanks GApeachy for asking the question. It gave me pause for thought. 


Idk if it really means all that much or not; wanted to know.  Like @Remedios  pointed out, CU's don't like an avg. client having an overabundance of available credit when looking to extend more credit...like why bother, right?   I'm preparing for a refinance at my local CU in a little over a year....I wanna look goooooood; not shabby.

”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 16 of 54
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Established Contributor

Re: Total Credit Limit versus Income ?

I'm the myFico counter-example with tcl only around 20% of total income.

Message 17 of 54
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Community Leader
Super Contributor

Re: Total Credit Limit versus Income ?

You'll find CUs that don't give a hoot about available credit and the same goes for large banks.
I've also seen the opposite with both.
Most of the time. It's not the lender, but a UW with nothing better to do but nitpick. 😂

There's no magic formula to the ratio.

When it comes to loans that are collateral based or secured loans( auto or home). As long as you pay your bills on time and have no late or missed payments. Along with the ability to repay the loan.
No one really cares how much available unsecured credit you have IME.

It's tough to deny a person for such loans. When the UW can plainly see by your credit reports that you're able to manage multiple accounts and remain blemish free.

When it comes to finances. There's a world full of folks that are high earners but can't manage their way out of a paper bag.😂
That person may not deserve lines of credit, their income may support under different circumstances.


If having a multitude of revolving lines makes you look shabby. I'm definitely one of the shabby ones 😂




My most prized tradeline.
Message 18 of 54
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Senior Contributor

Re: Total Credit Limit versus Income ?


@Gmood1 wrote:
When it comes to finances. There's a world full of folks that are high earners but can't manage their way out of a paper bag.😂
Smiley Very Happy Yeah!

If having a multitude of revolving lines makes you look shabby. I'm definitely one of the shabby ones 😂
Lol!  Thank you for responding.......In your case how's about "Shabby Sheek"Smiley LOL  (I'd gladly take that)
Really just saw the old thread relating to the 2:1 ratio; thinking about our upcoming refinance and wanted to know how income/total available credit is viewed today 2020 vs. the OP of 2015.
Our total credit limit is not huge; our income is not huge...that's why I want to optimize my cr's before my conserative CU under writing lays eyes on our reports.  Want a good balance if balance matters.
”MY TAKE HOME PAY DON’T TAKE ME HOME”
Message 19 of 54
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Moderator Emeritus

Re: Total Credit Limit versus Income ?

I'm about 1:1 currently if I look at my higher paying gig... though given that wasn't consistent through the entire year using the one that was it's more like 1.375:1 objectively.

 

Frankly that's about 40x what I have reported in any given month and those are months I make tax payments too, it's more absurd in a normal month.  Back in 2013ish I never expected to need/want more than 50K in TCL and that would still be appropriate honestly, but then my approvals jump-shifted from 5-7.5K range into the 22-30K range for the majority of my approvals and my TCL rose substantially as a result.

 

I just haven't closed any tradelines even if I took a strategic CLD on some of them... whenever we have a downturn I'm expecting to get half of them whacked so my thought is with more than I need but not absurd compared to income I have a good chance of coming through with more than enough credit to not worry about it even if I can always pretty up when needed anyway by pre-paying I'd rather not to (got grace period, use it, adds up over time) without maxing my tradelines as if we do have a pull-back, lenders will probably go back to caring about such things again whereas they don't now unless there are other red flags.




        
Message 20 of 54
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