I owe 13,000 on a 20,000 loan (2 years to go) on my used Mercedes. Have 3 Visa cards and 2 Dept. store cards. Total available credit 7,000. Owe $300. Is this too much available credit? Is my FICO score lower than it should be if I had say one Visa card?
RE: How much available credit First off your Fico score for some strange reason gives you a much better score to have 1 account for $5,000.00 than 5 accts. for 1K each! As for how much is too much, creditors will look at two things. A. Debt to Income (35% tops is normal) B. Potential Debt to Income (about 45%) This is the amount available on your cards, not any paid amount on a car loan)
RE: How much available credit Thank you for the numbers. I always wondered about actual vs. potential debt. One point of logic about the FICO score: the difference between one big card and several small ones could be due solely to the number of open accounts or number of accounts with balances. The high limit may not help you at all.
RE: How much available credit I do know that Fico will count open accounts even with a 0 Bal. towards the number of open accounts. It's strange though a person with 10 Accounts with high limits and a bit owing on them would probably have a better score than one with 10 accounts, low credit limits, but 0 balances. It defenetly gives a lot of points towards your high credit limits, the higher the limits the better you are!
