denied credit with good credit score
I got denied credit for the first time, applying for a heloc and then a car loan. Now before you go off- I'm probably not going to get a car and make payments. It's not financially wise. I have never done so in the past, but a part of me wants to trade in my CR-V for a Wrangler. I don't know if I'll do it, certainly not before buying my next house but I wanted to at least "practice being successful".
So my credit score is around 720 and my sole official debt payment is 1020 of home mortgage. Then I have 730ish to an income share agreement company for a few more years based on my earnings. Up to 17 percent of my monthly earnings up to 30k in total or 24 payments in total. That's a binding agreement but it's kinda off the debt books I think. Maybe the found it. Whatever. Still, that's it, so about 1700/mo and my income on the books is 4200 + 400 cash flow from 3 townhomes. I also have personal month to month rental income at my house I'm not counting.
But I have a good credit score and decent income. This was first time I was denied. They only offered 40k of heloc though I have a few hundred thou in equity and even the car loan denied me. That was a shocker. I don't need the money. I have cash in the bank-- too much just sitting in cash probably. I's because I'm not needy and stable that I'm shocked. I will be totally fine but it's because I will be fine that I'm confused about their decision.
Was it just straight debt to income? I guess if they divide 1750/4300 it's 41 percent. I didn't realize that was that high. In a few months I should get hired on and get a big pay bump from being a contractor. Let's hope. Then in year and a half when the ISA is paid off things will skyrocket up.
But i was wondering if they gross out my investment properties, in which it will skew everything to 50:50. Let's say you have a million in RE debt payments and 1.1M in revenue. It will be close to 50:50 and water down your personal income and obligations. But if you net them you just add .1M to your personal payments. I chose big numbers to illustrate the point. I have about 4000 in expenses and 4400 in revenue from investments.
This is stuff I have to learn. I won't get the car. that would kill me credit wise right now. I could even pay cash. But it was a shock to get denied that hahaha.
I have a lender I work with and he says he can get me my money. The times I was denied I didn't put much effort into it, into establishing a relationship. It was just a boilerplate application.