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. LOL maybe i should try the bodybuilding forums instead of the credit forums for this information on credit! I feel like this question has not been answered, but ... thank you everyone for the valiant attempts.
Since the goal here is minimizing debt to credit ratio .... My "Debt to Credit Ratio" of my "Mortgage" accounts is 83% My "Debt to Credit Ratio" of my "Revolving" accounts is 29% And my TOTAL DEBT TO CREDIT RATIO is showing as 75% Therefore my bolded question above remains: How does anyone ever get their debt to credit ratio down to 7% when you have things like Mortgages or Auto Loans? Clearly, though you state that its treated differently (not sure exactly what that means) .... the Mortgage debt/credit ratio is included in the total number. So its not treated differently as far as D/C ratio is concerned.
Okay so I read an article today stating that the typically advised 30% debt to credit ratio is false. And that most people with FICO over 780 have a debt to credit ratio of around 7%. Im not able to post the link since im new, but here's what it says: The best utilization percentage to have is 0% because then you have no credit card debt and you’re not paying interest. But, since that’s not realistic for everyone, the best percentage is the lowest percentage you can achieve. In fact, according to FICO, consumers who have scores above 780 have an average utilization percentage of 7%. There are reports all over the web that state 30% or 50% are the “target” percentages in order to achieve great scores. Those are false reports. In fact, nothing terrific happens at either 30% or 50%. 30% is certainly better than 50% but not as good as 20%. In general, the lower the percentage the more “points” you’re going to earn in the debt category, which is worth 30% of the points in your FICO scores. So while 30% is not terrible, it shouldn’t be your strategic target. And 50% is just an absurd number to shoot for. I’m not sure where those figures came from but you should not expect great scores carrying that kind of credit card debt. Pay down your credit cards as much as you can. There’s nothing good about having a lot of credit card debt. It’s expensive debt and it wreaks havoc on your FICO scores. If you can get your debt usage percentage to below 10% your scores will thank you. That being said - here is the anomaly. On my credit, my auto loan is listed as a "Mortgage Account". I have no idea why this is, but I have failed to get the agency to correct it. So that's the first question I have. Why is a car loan listed under "Mortgages" ? Therefore: how can anyone who has an Auto Loan get their debt to credit ratio under 10% ? Its understood that this is a loan that is going to have a high balance for many years. And just like a Mortgage it may never get as low as 10% becuase most people will sell their car long before it is fully paid off. 1) I can't imagine everyone with a 780+ credit rating owns all their cars fully paid. 2) Nor can i Imagine that the credit bureaus expect you to have a fully paid off car in order to reach 780 on your score. That just seems silly as it has absolutely nothing to do with responsible money handling. Thank you!