Personal Finance

I'm a Personal Credit Underwriter - Ask away

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Sep 7, 2003
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aidan24 wrote: A coworker of mine has the following situation:

Unsecured CC/LOCs with Limits totalling: 110K
Balance outstanding: 13-20k monthly which are paid off in full
Income: 165K annually, base
Assets: Home 500K, fully paid off
Car: 50K, fully paid off
Credit score: 779

He wants to get an unsecured LOC for 50K but doesn't want to close his existing accounts because he's had them for 15 + years.

If he doesn't want to go the heloc route, will banks be willing to offer him an unsecured loc with all of his other available credit.
He should be fine. I don't see any issues.
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Sep 7, 2003
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tcharged wrote: I have a question, I'm a 4th year student with good credit, I've had a Visa for 5 months, paid it off in full monthly, make plenty of debit transactions and banking activity, don't owe a cent for my University schooling or a cent to anyone or any bank whatsoever, should I apply for an AMEX card and another credit card? I have 10k in savings. I want to buy a house within the year I graduate (this spring), but I realize a great credit is everything. Should I get another couple credit cards to build credit, and should I apply for a LOC to help my credit?
thanks!
You should get a MC and Amex.
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Sep 7, 2003
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Julery wrote: Hey Hellfire,

I'm curious about how/when interest is calculated on a credit card.

eg. Say I just got a new card with a $5000 limit. First due date, for arguments sake is Oct 31. I am making use of it and paying it off daily. On Oct 30 I make a $4000 charge and wait a couple days to pay it off. Will I be charged interest on this? On the due date of the bill, does it look at your current balance, or do you have some sort of grace period on purchase.

Thanks
Well if your bill is due on Oct 31st, and you only pay off $4000 on Oct 30 and do not pay the remaining $1000 till after the due date, then yes, you will be charged interest retroactively from the date of your first purchase.
Sr. Member
Jul 29, 2009
895 posts
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Hellfire wrote: Well if your bill is due on Oct 31st, and you only pay off $4000 on Oct 30 and do not pay the remaining $1000 till after the due date, then yes, you will be charged interest retroactively from the date of your first purchase.
The poster asked about making a $4,000 charge on the 30th, and then paying it off in full a few days later. Since the statement would have been cut around the 10th or so, this charge wouldn't be due until the next billing cycle, and no interest would be due unless he failed to pay his next statement in full before the due date.
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Sep 7, 2003
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YYC27 wrote: The poster asked about making a $4,000 charge on the 30th, and then paying it off in full a few days later. Since the statement would have been cut around the 10th or so, this charge wouldn't be due until the next billing cycle, and no interest would be due unless he failed to pay his next statement in full before the due date.
LoL good catch. I just re-read that post for the first time lol.
Deal Addict
Jan 21, 2009
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Hellfire wrote: You should get a MC and Amex.
but I shouldn't apply for a LOC? and both of those CC's require an income of more than 15k a year to apply which I don't have...
Member
Dec 21, 2005
492 posts
13 upvotes
Say I have 2 LOC's with $10,000 limit.

Is there any difference in my credit score in the following scenarios?
One of the LOC accounts is nearly maxed and the other is completely payed off (available)
VS
$5000 balance on both LOCs
Newbie
Oct 21, 2009
2 posts
Let me start by thanking you Hellfire for this wonderful forum, very insightful.

FAQ:

Current score is 675
Annual Income: 95k (5 years at same job)
Don't own a home, but calculated GDS/TDS based on 400k mortgage
GDS: 29.28% TDS: 34.7%
Only debt is $18k car loan, 14k owing, and a $500 visa with a $200 balance.
Have a $188 collection from a dentist on bureau, paying it this month, didn't know it was there til I checked report.

Question 1:

I currently have an 18k car loan at a 14% interest rate established 18 months ago, balance owing on the car is now 14k. My credit score was 545 at the time of the loan due to some very old negative stuff on Equifax. Many things have dropped off and the score is now 675 and climbing. I never missed a car payment ($411), or any other payments in the past 2 years. I'm trying to get a much better interest rate and wondering if a LOC is an option, or is a conventional car loan more realistic. Are secured LOC's only secured with equity in a home, or can it be an automobile?


Question 2:

Im looking at a 400k house. I have 13k saved, but figure I will need at least another 10k to cover the min. 5% down plus closing costs. Is there any way to borrow that 10k, say from an LOC or conventional loan, and use it for the down payment? Is there any way to make it look as though that 10k is "gifted"?

If not doable, I'm looking at getting a cash back mortgage, right? If so, what would the min. score/TDS/GDS have to be to qualify for the cash back mortgage?


Ok, so more than 2 questions, but I appreciate your time in answering them and letting me know how approvable I may be for LOC/Car loan/mortgage...
Jr. Member
May 31, 2006
170 posts
1 upvote
In terms of paperwork and documents, what do I need to apply for Home Credit Line at the bank. Can this be negotiated at each different bank or most likely each bank will have the same rate?

Thanks in advance.
Newbie
Oct 20, 2009
1 posts
Hi Hellfire, all your help on this forum is much appreciated.

I have a couple of questions for you.

Not long ago, I was denied for a car loan by dealership financing. When I was shown the report run on equifax, it showed
-no FICO/Beacon score
-$17k in student loans
-about $7800 written off/unpaid cc balance on it

Now, when I ordered my Equifax report in 06, it didn't give me any score then either but it showed that last day of activity on the cc to be 10/03 and paid by collection agency on 04/04.

I have had credit check run on me 3 times this past year on TransUnion, my score came up 652 with one R9 on the charged off cc (last day of activity on 10/03). At the time I went delinquent on the cc, the balance was around $2100 but I was in a tough financial situation and was unable to make the payments. I have since bounced back and become very careful and responsible with my finances.

When the finance guy at the car dealer lot showed my report, it didn't say the last day of activity but instead showed last day of payment to be 04/04. Does that mean that's when the collection agency bought the bad debt from the original lender?

My other questions to you are: what happens now to the unpaid/charged off debt?
This month marks its 6th year since last day of activity on the cc. So should I expect it to purge from the system by next month?
Newbie
Mar 5, 2009
6 posts
Vancouver
Very frustrated...

Transunion score: 660
Equifax score: 790

I hate how there are multiple credit reporting agencies. I've been trying to increase my credit limit on my Visa from 2,000 to 5,000 but was declined. RBC simply looks at Transunion and Transunion only.

Transunion does not have any data on my mortgage (7 years no missed payments), car loan 5 years no missed payments, loc (borrowed 10k and paid it off completely with no missed payments). Equifax on the other hand does have this info (my credit union does not report to Transunion).

What Transunion reports is my only credit card with Visa (8 year history) with 1 - 30 day late payment ... no missed payments in the last 4 years.

1 roger's writeoff for $200 which is a very long story. Basically I sent back a smartphone and did not get credit for it. I had cancelled the plan so the dinged me for the phone. Eventually it went to collections and I just paid it thinking it would be easier. WRONG. They told me that if I pay this now, it will not effect my credit rating. What they did mention was that while THEY (being the collection agency) will not report a chargeoff, but they didn't mention that Roger's would still report the account as a chargeoff.

This happened in Jan 2008. I have monitored my Transunion score every month since 2009 and my score has not improved.

How can I improve my score most of my credit-related accounts do not report to Transunion?? Wait 6 years for the Rogers account to fall off? I make over 80k/year, own my home with over 125k equity, worked for the same company for the last 7 years. Like WTF?? Even if I go into RBC and speak with an account manager to get my limit increased, I doubt that will fix my Transunion score. Do I seriously have to apply for a different credit card or find some product that reports to Transunion to build more history? WTF :(
Member
Jan 10, 2009
242 posts
Hamilton, ON
How likely am I to get a line of credit to attend a university outside of Canada? It seems the Student LOC's only apply to CDN or select US unis.. I plan on attending a different one.

I am building up my credit (always pay off my CC on time and in full for 1.5 years), annual income of ~11 k, assets of around 8k, and my only debt is approx $1,500 of federal student loans - payable after I finish university.
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Sep 7, 2003
8346 posts
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Edmonton
guy312 wrote: Say I have 2 LOC's with $10,000 limit.

Is there any difference in my credit score in the following scenarios?
One of the LOC accounts is nearly maxed and the other is completely payed off (available)
VS
$5000 balance on both LOCs
Yes in case one expect your score to be lower.
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User avatar
Sep 7, 2003
8346 posts
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Edmonton
raymlea wrote: Let me start by thanking you Hellfire for this wonderful forum, very insightful.

FAQ:

Current score is 675
Annual Income: 95k (5 years at same job)
Don't own a home, but calculated GDS/TDS based on 400k mortgage
GDS: 29.28% TDS: 34.7%
Only debt is $18k car loan, 14k owing, and a $500 visa with a $200 balance.
Have a $188 collection from a dentist on bureau, paying it this month, didn't know it was there til I checked report.

Question 1:

I currently have an 18k car loan at a 14% interest rate established 18 months ago, balance owing on the car is now 14k. My credit score was 545 at the time of the loan due to some very old negative stuff on Equifax. Many things have dropped off and the score is now 675 and climbing. I never missed a car payment ($411), or any other payments in the past 2 years. I'm trying to get a much better interest rate and wondering if a LOC is an option, or is a conventional car loan more realistic. Are secured LOC's only secured with equity in a home, or can it be an automobile?


Question 2:

Im looking at a 400k house. I have 13k saved, but figure I will need at least another 10k to cover the min. 5% down plus closing costs. Is there any way to borrow that 10k, say from an LOC or conventional loan, and use it for the down payment? Is there any way to make it look as though that 10k is "gifted"?

If not doable, I'm looking at getting a cash back mortgage, right? If so, what would the min. score/TDS/GDS have to be to qualify for the cash back mortgage?


Ok, so more than 2 questions, but I appreciate your time in answering them and letting me know how approvable I may be for LOC/Car loan/mortgage...
Secured LOCs are only done when they are secured by property, cash, stocks, bonds etc.. So a car would not work.

I can't comment on the first part of your 2nd question. However, typically your GDS should be 32% or less, 40% or less for your TDS and so you'd be fine. Don't forget the CMHC fees. Min score is typically 650.
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Sep 7, 2003
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garfield2006 wrote: In terms of paperwork and documents, what do I need to apply for Home Credit Line at the bank. Can this be negotiated at each different bank or most likely each bank will have the same rate?

Thanks in advance.
HELOC rates are pretty standard, but sometimes one bank will offer a better rate than another, or have a promotion on.

In terms of paper work and documents, I suggest you talk to the bank. Typically however you need proof of employment, income and ID. Property tax assessment if you don't want to borrow that much and are trying to save on the appraisal fee.
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User avatar
Sep 7, 2003
8346 posts
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Edmonton
tirkah wrote: Hi Hellfire, all your help on this forum is much appreciated.

I have a couple of questions for you.

Not long ago, I was denied for a car loan by dealership financing. When I was shown the report run on equifax, it showed
-no FICO/Beacon score
-$17k in student loans
-about $7800 written off/unpaid cc balance on it

Now, when I ordered my Equifax report in 06, it didn't give me any score then either but it showed that last day of activity on the cc to be 10/03 and paid by collection agency on 04/04.

I have had credit check run on me 3 times this past year on TransUnion, my score came up 652 with one R9 on the charged off cc (last day of activity on 10/03). At the time I went delinquent on the cc, the balance was around $2100 but I was in a tough financial situation and was unable to make the payments. I have since bounced back and become very careful and responsible with my finances.

When the finance guy at the car dealer lot showed my report, it didn't say the last day of activity but instead showed last day of payment to be 04/04. Does that mean that's when the collection agency bought the bad debt from the original lender?

My other questions to you are: what happens now to the unpaid/charged off debt?
This month marks its 6th year since last day of activity on the cc. So should I expect it to purge from the system by next month?
No, it usually gets purged at the end of the 6th year. As for the other loan, I'd have to look at your report, but typically date of last payment is when you made the last payment, it doesn't reflect a collection agency buying the debt.
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Sep 7, 2003
8346 posts
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Edmonton
highvelocity wrote: How likely am I to get a line of credit to attend a university outside of Canada? It seems the Student LOC's only apply to CDN or select US unis.. I plan on attending a different one.

I am building up my credit (always pay off my CC on time and in full for 1.5 years), annual income of ~11 k, assets of around 8k, and my only debt is approx $1,500 of federal student loans - payable after I finish university.

It is a lot harder - you'll need to have a very strong canadian co-signer.
Member
Jul 25, 2009
411 posts
1 upvote
I have an idea of the answer but want an expert's answer.

Why are credit cards easier to obtain than line of credits.
Newbie
Jul 29, 2008
88 posts
3 upvotes
I have a friend who knows nothing about credit and only recently obtained a new credit card. It was a capital one secured MC. She's had it for about 3 months.

She wants to know if she will be approved for an unsecured CC even though she is new to credit.

If it helps, she is a student.

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