Much thanks for accepting this as your answer, azvalkyrie-ga.
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The following web page should give you an idea on the general impact of your
purchase on your credit rating, and things you can do to reduce that impact.
"Dealing with Debt" from the SolveYourProblem.com website.
http://www.solveyourproblem.com/your-credit-score/your_credit_score_and_debt.shtml
"Paying down your debts by putting down more than the minimum required monthly
payment can help you pay down your debts faster and so can boost your credit
score. Paying down more than you need to also shows lenders that you are in
good financial shape and conscientious about your debts - two qualities that
definitely make you an attractive credit risk to lenders."
The web page that I referenced indicates, and logically so, that anything
that increases your debt load, that is, the amount of money that you owe,
can hurt your credit score.
If you have now increased your debt to income ratio to over 35% or so, then
there is a very good chance your credit score will go down. This is why
the page that I referenced indicates you will want to reduce your debt load,
in this case your mortgage, as regularly, and as fast, as possible.
Check with your lender about paying down the principle with double, or more
payments that go to the principle only. Without a doubt, never be late with
a payment, and missing a payment would be horrendous.
As long as someone's debt to income ratio is over the "rule of thumb" 35%
then the betterment of the credit score is probably going to be slow to come,
but it still shouldn't make it impossible to get a credit card. Getting a
car financed might be another thing altogether.
This CNN Money web page has an interesting points on the above issues, and
are applicable before and after getting a loan.
http://money.cnn.com/2005/12/01/pf/saving/willis_tips/
"But if that debt is indeed yours, paying your bills on time is one of the
most important steps you can take in cleaning up your credit, says Greg
McBride of Bankrate.com. That alone counts for 35 percent of your score.
Make sure your debt load is not more than 50 percent of your available credit.
Allen Fishbein of the Consumer Federation of America says that often people
close down their credit cards to decrease the amount of credit they have. But
this lowers your credit limit making your debt to credit limit ratio increase."
This Debt Negotiation Services web page speaks of the "rule of thumb" 35% to
income ratio.
http://www.debt-negotiation-services.com/debt-reduction-elimination-articles/debt-to-income-ratio.html
"If your debt to income ratio is more then 20% and less then 35%, this
situation is still not bad for you. However, you will need to control your
debt from now on to prevent yourself from getting into real trouble.
If your debt to income ratio is between 35% and 50%, then your financial
situation needs a lot of attention."
If you need any clarification, please feel free to ask.
Search strategy:
Google search on: "debt load" "credit rating"
://www.google.com/search?q=%22debt+load%22+%22credit+rating%22
Looking Forward, denco-ga - Google Answers Researcher |
