Credit Club says DTI high

stuart_62

According to Credit Club I have a high DTI. As I understand this is based on min payments for credit cards and loan and mortgage repayments. On that basis mine is 36% which doesn't seem to be particularly high, however I rent so do I need to include that? Also do I need to include other payments like mobile and cable TV payments?

D3xt3r5L4b

Are you only paying the minimum on your credit card debts?

You can generally ignore what any CRA says about you since they aren’t a lender. 

adamp87

It’s more to do with credit used against income.

So if you have £5000 in credit & the day the report is pulled you are using £1800 that’s 36%.

Obviously if you are paying this off it’s not an issue; but long term if the percentage stays over a long period of time, another lender may look unfavourably on high credit use.

That in mind it’s not an issue if you are paying it, or aren’t looking for credit again immediately, it’ll settle when reduced.

stuart_62

I am paying significantly more than the minimum on my credit card but understood DTI calculated the way I described. Annoyingly the more I reduce my debt the more Experian reduce my score. Won't advise me why because get my credit report from MSE instead of paying for it from them.

MinuteNoodles

Your score is meaningless, lenders don't use it so ignore it, it even says so in the sticky at the top of the forum.

You have 1/3 of your gross income going on debt, typically the average person pays 1/4-1/3 of their gross income on rent/mortgage so that leaves you abou just 1/3 of your income to meet your daily regular living costs, not a problem if you're on £50k a year but if you're on £20k it'll be a struggle and you'll only need something unexpected to come along and you're in financial difficulty.

D3xt3r5L4b

stuart_62 said:

I am paying significantly more than the minimum on my credit card but understood DTI calculated the way I described. Annoyingly the more I reduce my debt the more Experian reduce my score. Won't advise me why because get my credit report from MSE instead of paying for it from them.

Your score means nothing which is the real reason why Experian can’t advise on it.

stuart_62

D3xt3r5L4b said:

stuart_62 said:

I am paying significantly more than the minimum on my credit card but understood DTI calculated the way I described. Annoyingly the more I reduce my debt the more Experian reduce my score. Won't advise me why because get my credit report from MSE instead of paying for it from them.

Your score means nothing which is the real reason why Experian can’t advise on it.

But should be able to explain why it has reduced for no apparent reason

[Deleted User]

If they explain why it's dropped, you'll stop believing in it. That's why they won't tell you.

It's dropped because you're paying off the debt. 

If you want a high credit score, you need to keep everything as it is and keep your debt high.

If you want lenders to view you as a low risk, you need to clear the debt.

Choose the option you prefer and go for it.