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I think my reported Credit to Debt Ratio is Incorrect ( need assistance in understanding such Arcaic magic)

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I pulled my Experian report today... I know i know, experian is the lesser of the 3 right, well it was free with my membership and i just wanted an update.


This is what i expected ( and to protect the innocent i am rounding off numbers here)


Had a car loan Origional limit was 23,000

> recently i had it paid to 16000

> I made a large payment of 13000

So my current balance is about 3000


So this is the major beef im encountering:


my credit report prior to this displayed my credit to debt ratio as 56%

I had assumed that after a large payment it would drop my percentage quite a bit because it was the bulk of my debt.


well when i pulled my new report is showed me my credit to debt as 54%.


I do have other accounts a few credit cards and 1 installment loan but i feel the credit to debt ratio should be far lower... here is why...


I added every account limit to show my full credit = about $40000

then i added all of my balances together (where a card was maxed i added the full limit) ... the total of this was 10000


as 10000/40000 is 25% shouldnt my credit to debt ratio be 25% not the 54% i see on te report.

With this i believe my credit score would get better because i am less in debt correct?


Please assist me if you can. All of this magical system algorithm of credit is killing me inside. I called experian and they had no idea what i was getting at

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I may have to create a Master Thread on credit vs. debt, and limits vs. income.


Are you talking about DTI, which is Debt to Income, IOW, payments divided by monthly income?


Utilization Percentage is REVOLVING NOT INSTALLMENT balances divided by credit limits.

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