Re: Is high credit card balance a red flag?

Re: Is high credit card balance a red flag? by Anna Mouse (CO) on June 26, 2012 @18:12

To you or I owing 15K on a credit card may be scary.

What you want to do is add up all of their payments for all of their debt shown to you by the credit pull. I think it should show you everything from student loans, credit cards and car payments See what is left over from their monthly net income. Will it be enough to not only pay rent but will they have enough for utilities, food and extra?

I upped what I required for income this time because my last tenant was really right on the line. While the credit score was fantastic I knew that what was going out was more than coming in or too close. If they do not have enough income they will be unhappy and you will pay for it.

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Re: Is high credit card balance a red flag? by outabout (Co) on June 26, 2012 @18:34	[ Reply ]

Hi Anna, Thanks for the input. How do you figure credit card payment, only the minimal payment required?

Re: Is high credit card balance a red flag? by Anna Mouse on June 26, 2012 @19:01	[ Reply ]

What we are trying to do is assese the risk involved in a) them not being able to pay rent b) possibly if they will be content living at the property because they can afford it. In regards to a) you are 99.9% safe because of their credit score. Because of their credit score you can rest assured that all of those horror stories will very likely NOT happen to you. In regards to b) I would use the minimum payments to total all payments due shown on the credit pull. Hopefully there is money left over for fun and savings?

Re: Is high credit card balance a red flag? by outabout (CO) on June 26, 2012 @19:13	[ Reply ]

Thanks, Anna. By using minimal payment their totally debt payment is pretty low compared to income. The total debt payment (credit card + student loan) plus rent is less than 1/4 of gross, and 1/3 of net. I think that I will approve them. Thanks for your input, appreciate it very much!

Re: Is high credit card balance a red flag?