Originally Posted by TrojanHorse
I just did this and I don't believe anywhere it asked about my income... doesn't Income play a big role in your score. I mean.. if you have $5000 in debt (out of $6,000 available credit) but make $500K annually, your score can't be that bad.. assuming you pay it timely etc.. but If I have the same $5000 debt (with the same $6,000 in avail credit) and $10K annual income and make the minimum payments and lets say its a 25% interest rate.. how can I have a the same score
Income playing into the score makes sense .... unless the score is calculated merely for predictive value that lets a particular creditor know what the likelihood of an individual is to pay off debt in a timely, predictable manner regardless of circumstances (even quite substantial circumstances like significantly higher income).
Wait.
Since the creditors are the one's who care about the score and all they care about is behavior (not max. potential capability), then it makes sense that income is less a factor than the historical reliability of a party to service their debt. [I do know some high income individuals who have some really lousy FICO scores. No small slice of entrepreneurial and finance types seem to be in this predicament at some point in their life.]
Perhaps realized and/or predicted changes in income should factor into scores more than income itself?
I have a question about the following scenario:
A person has 4 credit cards:
Card 1. Max credit 40,000; 0 revolving balance; used and paid each month.
Card 2. Max credit 75,000; 0 revolving balance; used and paid each month.
Card 3. Max credit 10,000; 0 revolving balance; used and paid each month.
Card 4. Max credit 3,800; 0 revolving balance; used and paid each month.
A. If they close the Card 3 account and open 1 new account, will there be any dent on the credit score?
B. If they close Card 1 and open 3 new accounts, how extensive will the dent on the credit score be for a high FICO score individual?