Question about credit - Chicagoland Sportbikes
Chicagoland Sportbikes
 
Open Forum This forum is for all off-topic discussion.

Reply
 
LinkBack Thread Tools Display Modes
post #1 of 46 (permalink) Old 12-01-2007, 12:17 PM Thread Starter
Registered User
 
NickIF's Avatar
 
Join Date: Jun 2003
Location: Westminster, Colorado
Posts: 3,260
Location: Westminster, Colorado
Sportbike: FJR1300
Years Riding: greater than a decade.
How you found us: google
           
Send a message via AIM to NickIF
Question about credit

Between various accounts (Bestbuy, credit cards, etc.) I have about 20k available. In the next year or so I'll probably be buying a house. How much of that available credit do I want to close (and how much should I keep open?) before I apply for a mortgage? Keep in mind that isn't debt, just available credit.
NickIF is offline  
Sponsored Links
Advertisement
 
post #2 of 46 (permalink) Old 12-01-2007, 12:22 PM
Registered User
 
black954's Avatar
 
Join Date: May 2005
Location: Winfield IL
Posts: 892
Location: Winfield IL
Sportbike: MV Agusta Brutale 1090RR, KTM 525EXC w/540 big bore
Years Riding: 17
How you found us: at strats on wensday night
           
It's not how much you have availiable, it's how much you owe. You are best off to pay off as much as possible so you have very little outstanding debt. If you are a first time home buyer, it should be pretty easy to get a morgage. Buying your first home is easier than getting a new car loan.
black954 is offline  
post #3 of 46 (permalink) Old 12-01-2007, 12:40 PM
The Violator
 
Troy's Avatar
 
Join Date: Oct 2003
Location: Lombard
Posts: 4,101
Location: Lombard
Sportbike: A little bit of everything.
Years Riding: Not nearly enough!
How you found us: On a ride in Colorado
           
Before making decisions on how best to qualify, the first step is to pull your credit and see what's reporting. There may be some surprises...

It's smart that you're thinking about it now when you have plenty of time to affect change. Many people don't become concerned with how they'll qualify or what they'll qualify for until they're ready to purchase
Troy is offline  
post #4 of 46 (permalink) Old 12-01-2007, 12:42 PM
 
Join Date: Sep 2006
Posts: 1,148
           
Don't close the cards. My parents were talking about how they had closed some credit card accounts that weren't being used and it actually hurt their credit score. Granted they don't have any debt, so take their experience if you're in a similar situation.
kcaarider is offline  
post #5 of 46 (permalink) Old 12-01-2007, 12:46 PM
U-P-G-R-A-Y-E-D-D
 
FiReBReTHa's Avatar
 
Join Date: Apr 2006
Location: Aurora, IL
Posts: 11,172
Location: Aurora, IL
Sportbike: 04 GSXR6
Years Riding: 2
How you found us: I thought it was a line for muffins
           
Send a message via AIM to FiReBReTHa
try to keep all debts under 50% of your limit.


correct, dont close the cards, and especially keep the oldest cards

www.firespeedtactical.com
Trial By Fire.
Like our page!
http://www.facebook.com/firespeedtactical

Quote:
"I'm spooning a barrett 50 cal. I could kill a building."
-Archer

Last edited by FiReBReTHa; 12-01-2007 at 12:48 PM.
FiReBReTHa is offline  
post #6 of 46 (permalink) Old 12-01-2007, 12:47 PM
Move along
 
Eugene's Avatar
 
Join Date: Sep 2005
Location: Cardboard box
Posts: 1,606
Location: Cardboard box
Sportbike: 08 GSXR 600
Years Riding: Day after yesterday
How you found us: referred
           
Send a message via AIM to Eugene
1. Pull credit to see what you're score is and also what is on your credit.
2. You don't really want to close out cards that you have had for a long time
3. As long as you don't owe substantial amounts on those cards you are good with keeping them open.
4. What you want to look at is your debt to income ratio.

If you want to estimate or get a feel for what it is. Add up all your debts that you pay on each month. If you have school loans that are on deferment then you don't need to count those for the time being.

Estimate what your mortgage note will be and add that along with your other debts. Then add other related costs for owning property i.e. insurance, gas, etc.. So the total of all those monthly debts should not be more ideally over 40% I think. You use the Gross amount of your pay. You can use the Net amount to be safe, but banks use the Gross amount to calculate that. If there is going to be another person on the Mortgage then you do the same total up both of the income and debts.

Xbox Live: BrBGot2Pee
Eugene is offline  
post #7 of 46 (permalink) Old 12-01-2007, 12:52 PM
The Halo hides my Horns
 
Lonely Raven's Avatar
 
Join Date: Jun 2007
Location: Bolingbrook, IL
Posts: 12,687
Location: Bolingbrook, IL
Sportbike: SV650
Years Riding: 1 year
How you found us: Google
           
Um...everyone said every bit that I was going to say.

So um...good luck! I hope you have no surprises.

Oh wait! Nobody mentioned that you get one free look at your credit score a year!

I think it's best if you go to each credit reporting agency (web page) and get your one free credit report, rather then go to a generic page that says Free Credit Report or something.

aut cum scuto aut in scuto

http://www.firespeedtactical.com

My ZenFolio Gallery: www.LonelyRaven.ZenFolio.com
Lonely Raven is offline  
post #8 of 46 (permalink) Old 12-01-2007, 12:56 PM
U-P-G-R-A-Y-E-D-D
 
FiReBReTHa's Avatar
 
Join Date: Apr 2006
Location: Aurora, IL
Posts: 11,172
Location: Aurora, IL
Sportbike: 04 GSXR6
Years Riding: 2
How you found us: I thought it was a line for muffins
           
Send a message via AIM to FiReBReTHa
LOnely raven FTMFW!!!

https://www.annualcreditreport.com/cra/index.jsp


I COMPLETLY Forgot about that.

www.firespeedtactical.com
Trial By Fire.
Like our page!
http://www.facebook.com/firespeedtactical

Quote:
"I'm spooning a barrett 50 cal. I could kill a building."
-Archer
FiReBReTHa is offline  
post #9 of 46 (permalink) Old 12-01-2007, 01:20 PM
Registered User
 
SilentAlero's Avatar
 
Join Date: Oct 2006
Location: Alsip
Posts: 8,508
Location: Alsip
Sportbike: 01 Giggy 7fidday
Years Riding: been riding your mom for years
How you found us: The hobo on lower wacker sold me the link.
           
Quote:
Originally Posted by FiReBReTHa View Post
LOnely raven FTMFW!!!

https://www.annualcreditreport.com/cra/index.jsp


I COMPLETLY Forgot about that.
thats such a generic copy.

if you want man, pm me and i can get you a full credit report. I'll shoot ya the pdf of it and we can go over it

Dgrsuspension.com

~ High Performance Coilovers

Silentedition.com
Quote:
Watching the Cubs lose is the opposite of appreciating a fine wine ó itís like watching a car accident in progress. Itís horrifying, yet gruesomely riveting, and you canít help but watch and sympathize with the poor souls inside.
Quote:
Originally Posted by burntash View Post
coming to CLSB for relationship advice is like asking fat people in mcdonalds about nutrition.
SilentAlero is offline  
post #10 of 46 (permalink) Old 12-01-2007, 01:38 PM
Pronto PLEASE !!!
 
SENGVIN's Avatar
 
Join Date: May 2007
Location: Countryside IL
Posts: 824
Location: Countryside IL
Sportbike: Bikeless :-(
Years Riding: 5 days now
How you found us: Brad Boehmer
           
Send a message via MSN to SENGVIN Send a message via Skype™ to SENGVIN
Quote:
Originally Posted by FiReBReTHa View Post
try to keep all debts under 50% of your limit.


correct, dont close the cards, and especially keep the oldest cards
NOT 50% BUT 35%

SENGVIN is offline  
post #11 of 46 (permalink) Old 12-01-2007, 01:45 PM
Ninja Kick!
 
Insomniac's Avatar
 
Join Date: May 2007
Location: Schaumburg
Posts: 1,648
Location: Schaumburg
Sportbike: 09 R6 09, RS125
Years Riding: Not enough
How you found us: Spongebob
           
As an addition to this I strongly suggest you call all of your current credit card companies monthly before you get your loan and request a credit increase. Thsi will kick up you debt/credit ratio and you will be in a far better position for your credit score.
Insomniac is offline  
post #12 of 46 (permalink) Old 12-01-2007, 02:08 PM
 
Join Date: Jul 2002
Posts: 1,028
           
Quote:
Originally Posted by NickIF View Post
Between various accounts (Bestbuy, credit cards, etc.) I have about 20k available. In the next year or so I'll probably be buying a house. How much of that available credit do I want to close (and how much should I keep open?) before I apply for a mortgage? Keep in mind that isn't debt, just available credit.
dont worry about open credit... Just worry about balances... Anything 30% usage or better is golden.
zeusrotty is offline  
post #13 of 46 (permalink) Old 12-01-2007, 02:10 PM
 
Join Date: Jul 2002
Posts: 1,028
           
Quote:
Originally Posted by SENGVIN View Post
NOT 50% BUT 35%
not 35 but 30
zeusrotty is offline  
post #14 of 46 (permalink) Old 12-01-2007, 02:42 PM
DONATING MEMBER
 
Chicago Performance's Avatar
 
Join Date: Jun 2007
Location: Northlake, IL 60164
Posts: 25,074
Location: Northlake, IL 60164
Sportbike: Trackdayz "I" bike!
Years Riding: since last year
How you found us: In a fortune cookie
           
Get prequalified and see what credit score is required for what you are buying and go from there. If you meet and exceed that score pretty well don't worry about it and keep your credit lines open. You never know when you will need them. If you are close or under by a little then you might have to adjust your open lines of credit based on that. Available credit is another criteria creditors use to evaluate, and if they feel you have too much unused credit that might overextend you if you decide to use it all it might hurt you. $20K isn't bad though and shouldn't hurt you. Keep them open.

------->> Best motorcycle shop ever!

http://www.chicagoperformance.com/
Chicago Performance is offline  
post #15 of 46 (permalink) Old 12-01-2007, 04:03 PM
Armed law abiding citizen
 
Dave13's Avatar
 
Join Date: Aug 2006
Location: Middleburg, Florida
Posts: 19,055
Location: Middleburg, Florida
Sportbike: '74 Yamaha RD350
Years Riding: idk
How you found us: Google
           
If possible, have extra cash at the time of closing. Stuff always pops up, and the cash is handy.
Dave13 is offline  
post #16 of 46 (permalink) Old 12-01-2007, 04:17 PM
Registered User
 
JRSMAIL's Avatar
 
Join Date: Aug 2003
Location: Johnsburg, Il
Posts: 9,428
Location: Johnsburg, Il
Sportbike: A weed wacker
Years Riding: Just started today as a matter of fact..
How you found us: A dream I had once
           
Send a message via MSN to JRSMAIL
Cash Is King.

Jon
MSF Instructor


<---- Useless

Always Stand For What You Believe In... Even If Means You Stand Alone...
JRSMAIL is offline  
post #17 of 46 (permalink) Old 12-01-2007, 04:34 PM
 
Join Date: Feb 2005
Posts: 4,039
           
Quote:
Originally Posted by Insomniac View Post
As an addition to this I strongly suggest you call all of your current credit card companies monthly before you get your loan and request a credit increase. Thsi will kick up you debt/credit ratio and you will be in a far better position for your credit score.
WHOAH!!! I wasn't going to say anything until I saw this. Nick do not listen to them. They are incorrect. The mortgage company will look at your debt to income ratio BUT they will also take in to account of how much credit you have available to you!!! This can be a negative thing to them because as they see it, the more credit you have available to you, it is a chance for you to get into that much debt. If your credit score is excellent and you are not in a lot of debt and you have substantial credit history of paying all your bills off on time, don't worry about it.

Quote:
Originally Posted by JRSMAIL View Post
Cash Is King.
EXACTLY Worry about what's in your checking and savings accounts!
meech is offline  
post #18 of 46 (permalink) Old 12-01-2007, 04:59 PM
Registered User
 
Monster231's Avatar
 
Join Date: Dec 2005
Location: River North
Posts: 479
Location: River North
Sportbike: GSXR 750 Ducati 748
Years Riding: 8
How you found us: twf
           
It is critical that you do not close any accounts in the next year!! It makes it look as if you are not worthy of credit. Instead pay down the balances and keep them open.. Make sure you have at least 70% of you credit limit available
Monster231 is offline  
post #19 of 46 (permalink) Old 12-01-2007, 05:12 PM
CRF50 Squid
 
Join Date: Sep 2004
Location: Chicago
Posts: 9,588
Location: Chicago
Sportbike: K6 GSX-R 750, 1971 CL350
Years Riding: Veteran Poser
How you found us: Google
           
Send a message via AIM to Blah Blah Blah
I would deliver pizzas and make some extra cash. Pizza deliverers make a ton of cash on the side.

"The man who makes me your enemy, it is he who be the guilty one....Here I abandoned peace and desecrated law; fortune it is you I follow. Farewell to treaties. From now on war is our judge!"

Last edited by Blah Blah Blah; 12-01-2007 at 05:16 PM.
Blah Blah Blah is offline  
post #20 of 46 (permalink) Old 12-01-2007, 05:19 PM
Grid Marshall.
 
Cerk's Avatar
 
Join Date: Mar 2005
Location: Naperville
Posts: 29,343
Location: Naperville
Sportbike: Tweener
Years Riding: Do I have to start over now?
How you found us: Followed the Bread Crumbs...
           
Send a message via AIM to Cerk
Nick, shoot Team Serpent a PM, I'm sure he'd be able to assist

Tom

Quote:
Originally Posted by Tacitus
In a state where corruption abounds, laws must be very numerous.
Cerk is offline  
post #21 of 46 (permalink) Old 12-01-2007, 05:53 PM
Ninja Kick!
 
Insomniac's Avatar
 
Join Date: May 2007
Location: Schaumburg
Posts: 1,648
Location: Schaumburg
Sportbike: 09 R6 09, RS125
Years Riding: Not enough
How you found us: Spongebob
           
Quote:
Originally Posted by meech View Post
WHOAH!!! I wasn't going to say anything until I saw this. Nick do not listen to them. They are incorrect. The mortgage company will look at your debt to income ratio BUT they will also take in to account of how much credit you have available to you!!! This can be a negative thing to them because as they see it, the more credit you have available to you, it is a chance for you to get into that much debt. If your credit score is excellent and you are not in a lot of debt and you have substantial credit history of paying all your bills off on time, don't worry about it.
Oh, so the mortgage broker AND the bank manager I spoke to both have no idea what they are talking about, right.....

http://en.wikipedia.org/wiki/Credit_...(United_States)

30% of your credit score is made up of credit to debt ratio. Credit score is simply an algorithm, it does NOT take into account your income or any other factors. This is why when you get a credit card they ask you what your household income is, so they can use this to determine if you are overextending your credit. The thing about them requesting this information is they are NOT legally allowed to ask your employer what your income is. They can ask for payslips and whatnot, but it's not hard to get your employer to artificially bump your payslips for a month or two so it looks like you are making what you report to the lender. What does this mean? You can very easily get a higher credit score as well as make it appear like you are not overextending your credit.

Mortgage lenders were advising sub prime borrowers to do exactly this until it became illegal for them to do so. Learn from the shady people, taking shortcuts doesn't always get you in trouble as long as you have the cash to back yourself up.
Insomniac is offline  
post #22 of 46 (permalink) Old 12-01-2007, 06:14 PM
Grid Marshall.
 
Cerk's Avatar
 
Join Date: Mar 2005
Location: Naperville
Posts: 29,343
Location: Naperville
Sportbike: Tweener
Years Riding: Do I have to start over now?
How you found us: Followed the Bread Crumbs...
           
Send a message via AIM to Cerk
Quote:
Originally Posted by Insomniac View Post
Oh, so the mortgage broker AND the bank manager I spoke to both have no idea what they are talking about, right.....

http://en.wikipedia.org/wiki/Credit_...(United_States)

30% of your credit score is made up of credit to debt ratio. Credit score is simply an algorithm, it does NOT take into account your income or any other factors. This is why when you get a credit card they ask you what your household income is, so they can use this to determine if you are overextending your credit. The thing about them requesting this information is they are NOT legally allowed to ask your employer what your income is. They can ask for payslips and whatnot, but it's not hard to get your employer to artificially bump your payslips for a month or two so it looks like you are making what you report to the lender. What does this mean? You can very easily get a higher credit score as well as make it appear like you are not overextending your credit.

Mortgage lenders were advising sub prime borrowers to do exactly this until it became illegal for them to do so. Learn from the shady people, taking shortcuts doesn't always get you in trouble as long as you have the cash to back yourself up.
These are the absolute WORST threads. Everyone's an expert. (I'm not referring solely to you )

Tom

Quote:
Originally Posted by Tacitus
In a state where corruption abounds, laws must be very numerous.
Cerk is offline  
post #23 of 46 (permalink) Old 12-01-2007, 06:21 PM
Irony helps us play!
 
Arch's Avatar
 
Join Date: Jan 2006
Location: N'ville
Posts: 29,508
Location: N'ville
Sportbike: 2000 F4
Years Riding: Long enough to know better
How you found us: some hot MILF whispered it in my ear
           
credit is like underwear.... it's a personal thing and I don't like telling anyone what they should do w/ theirs.

Everyone Exaggerates

We're being taken for a ride... agaaaaaaain.....


Best Auto/Moto Insurance | Motorcycle Protection Today | FREE Trade-In Quote
Arch is offline  
post #24 of 46 (permalink) Old 12-01-2007, 06:27 PM
DONATING MEMBER
 
Chicago Performance's Avatar
 
Join Date: Jun 2007
Location: Northlake, IL 60164
Posts: 25,074
Location: Northlake, IL 60164
Sportbike: Trackdayz "I" bike!
Years Riding: since last year
How you found us: In a fortune cookie
           
Realistically you are both right. To get a house the main criteria are debt to income and credit score. Opening up more credit doesn't affect your debt to income unless you use it, but it does affect your credit score. Usually your lender will verify your credit a month or so before closing and approval for the house, after that time if you need to open or bump up more credit you can do it then. Again, figure out what kind of room you have on either of those positions and max them out before closing. You will put yourself in the safest position as long as you have self control with your spending. More available credit and a higher loan amount is the best so your funds and credit are freed up. If you want to pay down your mortgage after closing you can do that if you are in the position to do so, but wait until after and you have a decent cushion. Or open up an equity line just in case you need it. You don't have to use it, but normally when people need it is when it is hard to get. If you lose your job, get hurt, or something else traumatic happens you can use that cushion before you are late on your mortgage and problems start to pile up. Just my two cents.

------->> Best motorcycle shop ever!

http://www.chicagoperformance.com/
Chicago Performance is offline  
post #25 of 46 (permalink) Old 12-01-2007, 06:34 PM Thread Starter
Registered User
 
NickIF's Avatar
 
Join Date: Jun 2003
Location: Westminster, Colorado
Posts: 3,260
Location: Westminster, Colorado
Sportbike: FJR1300
Years Riding: greater than a decade.
How you found us: google
           
Send a message via AIM to NickIF
Thanks for all the replies. Like Michelle stated I had heard it was bad to have to much available credit (as it could be debt) and I was looking for the "magic number". My debt right now pretty much consists of what I owe on my truck (about 20k), and that will be at least cut in half by the time I'm ready to buy. I guess I'll keep the cards I have and pay them off in full monthly. Thanks
NickIF is offline  
post #26 of 46 (permalink) Old 12-01-2007, 06:47 PM
SICK OF IT ALL
 
Ocean's Avatar
 
Join Date: Aug 2003
Location: Dallas, TX
Posts: 4,471
Location: Dallas, TX
Sportbike: missing my RC51
Years Riding: 9+
How you found us: drove by Strats one night & stopped in
           
^that is a good plan

-also do what troy said & look at your bureau to make sure the correct data is on there

Wayne


Standing together
Side by side
Staying true to whatís inside
United as one, we fight

Ocean is offline  
post #27 of 46 (permalink) Old 12-01-2007, 06:59 PM
 
Join Date: Feb 2005
Posts: 4,039
           
Quote:
Originally Posted by Insomniac View Post
Oh, so the mortgage broker AND the bank manager I spoke to both have no idea what they are talking about, right.....
If they both told you to hike up your available credit as much as possible, then yes it all depends on your situation though, maybe you had bad credit to begin with

Quote:
Originally Posted by CerkMX View Post
These are the absolute WORST threads. Everyone's an expert. (I'm not referring solely to you )
I'm no expert, I just do my research and have had 2 mortgages and 1 refinance in my life so I am speaking from experience. Although I have dealt with LaSalle and US Bank

Quote:
Originally Posted by NickIF View Post
Thanks for all the replies. Like Michelle stated I had heard it was bad to have to much available credit (as it could be debt) and I was looking for the "magic number". My debt right now pretty much consists of what I owe on my truck (about 20k), and that will be at least cut in half by the time I'm ready to buy. I guess I'll keep the cards I have and pay them off in full monthly. Thanks
Best bet is to call a couple of the major mortgage loaners and get their opinions b/c ultimately their opinions are really the only thing that matters. I would suggest using a major bank for your loan as I have heard horror stories about brokers selling loans. But that's not 1st hand experience so it could just be hearsay
meech is offline  
post #28 of 46 (permalink) Old 12-01-2007, 07:03 PM
Grid Marshall.
 
Cerk's Avatar
 
Join Date: Mar 2005
Location: Naperville
Posts: 29,343
Location: Naperville
Sportbike: Tweener
Years Riding: Do I have to start over now?
How you found us: Followed the Bread Crumbs...
           
Send a message via AIM to Cerk
Quote:
Originally Posted by meech View Post



I'm no expert, I just do my research and have had 2 mortgages and 1 refinance in my life so I am speaking from experience. Although I have dealt with LaSalle and US Bank


I wasn't referring to anyone in particular. These threads just always devolve into bitter arguments between people that think they know better than other people. It's always a mess

Tom

Quote:
Originally Posted by Tacitus
In a state where corruption abounds, laws must be very numerous.
Cerk is offline  
post #29 of 46 (permalink) Old 12-01-2007, 07:11 PM
Puppy Love!
 
Gixx's Avatar
 
Join Date: Aug 2005
Location: Aurora
Posts: 3,462
Location: Aurora
Sportbike: 05' Gixxer 6
Years Riding: Grew up in the dirt, going on my 7th season on the street..
How you found us: Homer Simpson
           
Send a message via AIM to Gixx Send a message via Yahoo to Gixx
Find a broker or a mortgage company who uses scoreright. It is a fairly new Experian product that myself, along with a few other people have spent almost a year developing. It is an AWESOME product, and I know a lot of the major lenders are starting to use it. We used over 500 test cases with the product and all were VERY accurate. It is basically a product where a bank, broker, whomever can put all your credit info into a software, change things on it, just to see what if you did this to your credit (ie - closed a credit card) how would that affect your credit score. It is very cool, and becoming popular fast. Everyones situation is so different it is hard to say what could help your score, and what could hurt it....That is the joy of credit.

KJ
_____________________________________________
The CLSB Bitch Wrecking Crew

Quote:
I'm here to chew some bubble gum, and kick some ass.......and I'm all out of bubblegum!!
MySpace
XBox Live - Gixx009
Gixx is offline  
post #30 of 46 (permalink) Old 12-01-2007, 07:18 PM
 
Join Date: Feb 2005
Posts: 4,039
           
Quote:
Originally Posted by CerkMX View Post
I wasn't referring to anyone in particular. These threads just always devolve into bitter arguments between people that think they know better than other people. It's always a mess
hey buddy

meech is offline  
Reply

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on the Chicagoland Sportbikes forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:
OR

Log-in










Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode



Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome