LS69TA

iTrader: (30)

How much does your debt to income ratio affect your credit score? Mine dropped a bit when I got into this debt settlement program to pay off some credit cards and stuff. Now that I'm selling my house and getting $60K out of my name, is that going to help very much?

neodamonkey

iTrader: (7)

It may not help that much, your credit score usually goes up due to a mortgage note. Mortgage notes and car notes are usually not frowned upon by the three credit bureus.

What they dont like to see is high credit card bills, because it is showing you are living outside of your means....

Blue 98 Ram Air

iTrader: (29)

Pm me what company you went with. I work for one and may be able to help you more and not affect your credit as much.

LS69TA

iTrader: (30)

PM sent. Yea I knew about high credit card balances hurting scores but haven't really ever heard about how much the income/debt ratio affects it.

PK 01somWS6

Your DTI has nothing to do with your credit score. Your % of available credit / credit limit is a huge part of your score.

99FRC

iTrader: (5)

All of these credit settlement companies are going to hurt your credit. Once you're in one, other companies are reluctant to offer you credit. With that said the previous post was correct. debt to income has nothing to do with your credit rating. It's the ratio of your available credit, to the amount of credit that you're using. Usually less than 50% is ok and less than 30% usage is good, for a rule of thumb. Selling your house will not help because once you sell, that is credit that is no longer available to you. make sense?

99 FRC

MavrikTA

iTrader: (27)

^^Exactly right. Your 'credit score' is a completely seperate issue from your DTI ratio, which, in my experience, they dont like to see over 40%.
Ive found that there are basically 4 factors in recieving credit:
1. Length of employement
2. DTI
3. Revolving accounts payment history and balance.
4. Credit score(which is usually of lesser concern so long as it is within certain criteria).

LS69TA

iTrader: (30)

Ok. Well atleast my DTI ratio will be in my favor in 2 weeks when the buyer closes on my house.

quickblade

What you do after you sell your house.. I know because I got the money and paid it all off. From the debt settlement crap.. Your credit will look like swiss cheese...
Take the money from your house sale, depending on the debt settlement, mine allowed for early pay off...
Paid it off, and now I am running int the 804's... came up from the 640's..
so if you can, pay off, and there you go.. you will bein good shape

Tiago

iTrader: (27)

you need to find out how long it will take your credit score to reflect the changes after your DTI is changed and your bills are payed off... Im sure its not instantaneous lol

LS69TA

iTrader: (30)

Well I'm just basically breaking even on the house. Not going to profit any after closing costs and fees. I got stuck with an adjustable mortgage rate thanks to my ex-wife. It's gone up to 11.82% after 4 years and jumped $200 a month. I'm just going to rent a cheap place and use the extra $ each month to pay off the few little accounts I have left open and go from there.

LS69TA

iTrader: (30)

Yea, I figure 3-6 months but I guess that's better than never.

4DR Assassin

You score will reflect any changes that are sent to the Credit Reporting Agencies (3 major CRAs - Experian, Equifax, Trans Union) and updated by their system. So if you have a letter showing an account has been paid...mail it to the CRAs. It can be as quick as a week or as long as a couple of months. I worked for a CRA, so I've had to deal with these kind of questions.

Your score is based off of what's on the report. If you pay something off and it shows that on the report, then it will reflect in the score. The factors that are used in generating a score are Public records (any liens, judgements, bankruptcies if you have any), Credit items/accounts (acct type, balance, pay history, limit, etc) and inquiries shared w/ you and others. Other than that, nothing else. Employment, personal info doesn't get factored in. Now a bank/creditor might look at your employement history, pay checks when determining to give you credit. It just won't get factored into the score. Your actually salary (income) isn't kept as part of your credit report. They don't keep that kind of info. The bank you're trying to borrow from my try to look that up, but CRAs do not.

Also one thing to know is what credit scoring model the bank or credit grantor is using. There are more than one. There's the Vantage, FICO, Beacon. They are all different mathmatical models so the scores/scale can and will vary. For example. If you want to Experian and got a Vantage score for your Experian report. Then you went to My FICO and pulled your score using Experian's report odds are greatly in favor of your score being different by more than a few points. Same info, different math model.

Hope this helps so. If I can answer some questions, I'll try. I hated the job, but it definitely gave me a lot of info about credit and how banks/creditors try to cheat us using the report as an excuse. You wouldn't believe some of the stuff they try to pull.

Good luck!

baldurann

iTrader: (15)

ok, I have a question. I have a loan account through a bank that was closed, due to the fact that I didn't have a job for a while... anyways, I have a pretty good job and plan on paying off the rest of the loan in full within the next 2 to 3 months, and I was wondering how long it would take to build some credit back up, as I'd like to finance a car in a year or so. I have two credit cars also that were past due for a while, but now are way under their limits, and are being paid on like normal.
also, one of the creditcards was closed.. any idea if I could get that reopened? or are credit accounts like bank accounts in the fact that you can't reopen them?

thanks!

4DR Assassin

It depends. Some creditors will actually use the same acct number. Some will actually leave that account # closed and add another credit item to the report. Odds are in favor of them opening another account number though.

Basically it's just time that helps it the score. As accounts age, it changes their worth just like the balance history, when they were openend, payment history, etc. Like others have said...keep the balances low on revolving credit, don't do a lot of applying for credit cause some creditors use that against you and do not let accts go to collection. Keeping paying on time and don't let anything potentially negative get on your credit.

The whole credit score model is a guarded secret. Everyone says their scoring model is more accurate than another so they will not tell you how items are weighted. I've seen were people have paid/closed accounts that were opened, never late and their score went down. I've talked to people who have close to the highest score possible but denied for a Lowe's credit card. It's like a big game we have to play not to get cheated.