DTI vs Credit score

[Pete Storseth]

Credit score 710. DTI high. Income low.

Hey guys, here's my question. I'm trying to lower my DTI by paying off one of my loans early and another credit card. But I still have two cards left I cant pay off yet. I will be working towards increasing my income and paying them off in coming months, but may be able to time everything right to get a loan sooner than later. I'm not working with conventional banks, I'm working with a smaller chain that I can still get a 0% down payment and low interest rates.

I want to know if my credit will take too much of a hit to open a new 0%APR card and use the free introductory transfer to combine the two cards onto the new one, effectively reducing the two payments a month to one, leaving me with 3 zero balances, lowering DTI. Then, two months later applying for the loan.

Problem, if course, is that would be two hard inquiries in two months. Is this a bad idea? Is it wiser to just see if I can get one the cc companies to waive the transfer fee and NOT open a new account? Problem with that is that the 0%APR on them expires later this year.

[David M.]

@Pete Storseth

Hmmm... I get it. Tough call.

How about I give you this piece of advice: invest ‘what you can afford to lose.’ Don’t take it literally.

The point is, what’s the point in have a performing investment when you are getting killed by credit card at 20% plus? You need to be, or should be in my book, on solid footing to be investing. When you have property, expenses are going to pop up. You need that reserve to be able to weather, or even address, them.

How about this... you know how to do calcs for interest and return, right? What if you had a property that gave you 10% yearly return, cash on cash. How much money would you have say in 5 or 10 years??? How about if it was 20% return? See where I am going with this? That’s what your credit interest is doing to you. The cc issuers are making a killing off you.

Just a suggestion: as part of your commitment to getting the deal this year, agree to yourself to make getting on firmer financial footing one of the initial steps.

Just my two cents / point of view. Good luck on whatever path you choose.