will76

This is how i do it:

If it is non income producing, and expense like TV, boat, car, etc... i pay cash.

If it is an (real estate) investment, I put down 20% and ALWAYS finance 80% and use the banks money.

If you pay 100% cash for (real estate ) investments you are stupid.
If it is a high risk investment like starting a business, restaurant, etc... i would pay cash assuming it would fail, in that case don't play with more than you can lose. For realestate, if you have half brain, you will be ok. use the banks more and do more deals.

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ICQ: 86364801 Email: will [at] innovativeassets [dot] com

rounders

Well you know acutally its better to keep a low maintaing balance like a gas card, they want to be able to see your able to do that

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ICQ#: 153923840

V_RocKs

Wrong...

Having a low debt to income ratio is exactly what gets you credit. It is what closes the deal when the credit report doesn't tell the entire picture.

Personal example:

Before I made real money I made shit money and I ran up credit cards along with my ex-wife. For the record, she ran them up about 3 times faster than I did and I used the money to actually pay for things we needed (new steering pump, etc).

When we divorced I said fuck it and never paid a single card. Years went by with me thinking (wrongly) that after 7 they would fall off anyway. Well, sure, the original 30 days late fell off but all of the 180 days late over the last 7 years stayed on and fell off as they came due. In other words, I had years of lates reported and still do.

I paid off all of my cards... In full...

So I went to buy a car. The loan officer laughed at me. Sure, I paid off the old debts but he didn't give a fuck. So the owner of the dealership popped in to ask him to lunch and when I figured out who he was I asked him, "Bro, I have a credit score of 518 and I know that is a shitty score. However, I have since paid off all of my debts and my credit report reflects that. I now make $80K a year (this was 4 years ago) and my debt to income ratio is about 8%. I am not asking for a 2003 BMW with all of the trimmings. I am asking for a used 98 Jeep Cherokee with some of the trimmings. What is more important to you, my credit score and past misdeeds or my current income to debt ratio that is going to allow me to buy a car from your competition?"

I got my car and I paid it off in 8 months.

Bad idea.... I didn't show a lengthy ability to use credit. So I bought another car. They also laughed at me. I showed them how I make $120K a year (2 years ago) and told them it was no problem, I will just buy from their competition. My debt to income ratio was 5%. How could they turn me down?

They couldn't...

In each case it was the fact that my debt to income was so insanely in my favor that they let me buy the cars.

Now take a lottery winner. Cash out all at once. $5,000,000. The guy has a credit rating of 560. But just about any bank is going to allow him to borrow because his debt to income ratio is less than 1%.

If you want a higher score, pay the cards down and ask for a higher limit. Your score will improve and it will show that your available credit to used credit is high. This is good. It means that people trust you.