How Low Can You Go

Debt-to-Income Ratio.

Sounds impressive, doesn't it? Well, it didn't sound so impressive after realizing how it kept me from getting the credit I needed!

To determine debt-to-income ratio, basically, you take all your credit debt (from credit cards, car loan, etc.) and divide it by your gross annual income. For example, if you have a debt of $14,000 and your income is $40,000, your debt-to-income ratio is 35%.

Will banks give you a loan if you have a debt-to-income ratio of 50% or more? Most unlikely.

How about 40%? Eh.

30%? Aaaaaaah, now we're getting somewhere.

In short, don't think an excellent credit history and FICO* score of, say, 700 and above will get you that loan.

Luckily, Washington Mutual is not as asinine as most banks in giving credit. That is, they are more lenient and don't question your integrity as much. They're also extremely fast with the application process. Kudos.

Thanks to my refunds from last year's tax returns, I was able to work down my debt and get the line-of-credit I needed.

*sigh* Finally, I can start my small business.

Movie Pic of the Month

Defiance

* FICO = Fair Isaac & Co., the company that developed the credit scoring system

Brain Cuisine

Food For Thought:

When you burn bridges, you pay a heavy price, and usually there's no refund policy.