Debt to income ratio (DTI) is used by creditors when determining whether or not you will be approved for a loan or line of credit. These institutions are not the only ones who use DTI.
Your Credit Score uses DTI! One third of your credit score is determined by the debt you owe.
- What is the amount owed on accounts?
- What is the amount owed on specific types of accounts?
- How many accounts have balances?
- What is the proportion of credit lines used?
- What is the proportion of installment loan amounts still owed?
Even if you have some lines of credit with smaller balances, your credit will be affected by it. The credit score needs to reflect what you could owe as well. For example, if you have a credit line for $1500 and the balance is only $500, they will rank you on the $1500 because you have the potential in owing that total amount. Some lenders who choose to lend money to people with high DTIs will charge higher rates for the loan.
You may make tons of money each month, but if you owe or have lines of credit for just as much or more, you too can be affected by DTI.
If your DTI is hurting your credit score, Spotya! Payday Loans will still be there to help. The rates by which you are loaned money is not calculated using anything from your credit score. There is no discrimination, there are set fees no matter how much money you make. States that we service have each set the maximum amount of money which we may lend.
