|Debt to Income Ratio: Car Loan Credit Card Home Loan Turned Down With Good Credit Score||
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Debt to income ratio's have nothing to do with credit scores. You can be turned down for credit with good credit if your debt to income ratio is around 45%. Debt to Income Ratio: Car Loan Credit Card Home Loan Turned Down
Calculate your "debt to income ratio" like this. Total all of your monthly obligations reported to the three credit bureaus Experian, Transunion and Equifax. Then add in rent if no mortgage is reported. Divide this number by your total gross monthly income. Or total income before taxes are taken out.
Example. You have 3 credit cards for a 300 dollar a month total and one car loan for 400 per month. You have no mortgage and your rent is 750. That would be a 1450 dollar per month obligation. Lets say you make 4000 per month before taxes. So divide 1450 / 4000 = .3625 or 36 percent. Most lenders will want your debt to income ratio to be lower than 45 percent or they will deny credit n matter how high your score is
A 771 credit score would suggest your "balance to credit limit ratio" is very good. If you are denied credit with such a high score it would have to be for debt to income ratio to high. I have seen people get turned down for car loans over and over because they are a waiter, plumber or a self employed person who cannot prove by tax returns, 1099's or pay stubs that they can actually take on more debt than what is already reported to the credit bureaus. The banks always take into account some sort or monthly rent and utility figure that may not show on your credit reports.
Debt to income ratio: Debt ratio: Monthly debt to gross monthly income. Turned down monthly debt to gross income ratio above 45%Debt to Income Ratio: Car Loan Credit Card Home Loan Turned Down
You must have 3 - 6 lines of good credit to improve bad credit. Paying off collections, rent, cell phones and medical bills do not build a good credit report or score.
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