There comes a time in your life when you need to make a big purchase such as buying a house to raise your family, or for investment purposes. Going to big name lenders is usually the way to go when looking for capitals to buy your dream house. Here you are knocking on lender’s doors asking for a loan and hoping you’d get it. One of the many important things that lenders look for is your debt-to-income ratio; if it’s too high, you’re likely not going to get approved.
Too many Credit Cards…?
Now you’re looking at your stacks of credit cards and wondering if you’re in trouble, if they’re all maxed out then yes you are in trouble. The real question here is having too many a bad thing? The answer is Yes and No because everybody’s situation is different. If you have a ton of credit cards but never use them, that can be a bad thing too because in the eyes of those lenders, that’s potential liability and it can affect your eligibility to get approved.
Another big factor in determining your eligibility is how responsible are you with those credit cards? Opening up a bunch of credit cards just so you can have a higher limit can backfire and lower your credit score. Try to keep a small balance that you know you can pay off every single month and keep it consistent, not only will it improve your credit score but also shows that you are financially responsible. According to myFico.com, about 35% of your total score is based on your payment history, the key is keep a low balance and pay it all off. More is not always better, lenders do look beyond your credit score when deciding whether or not you’re eligible or not.