Home > Credit Score > The Non-Credit Score Numbers Your Lender Wants to Know

Comments 0 Comments
Advertiser Disclosure


A client recently went to the bank to talk about opening a line of credit. She filled out an application, then the banker entered the information into his computer and reviewed her credit score. But her credit score was just one piece of the puzzle; there were other numbers he was interested in, too.

That’s right, a credit score is only part of the calculation that creditors use to decide whether or not lend to you.

While each creditor has their own decision-making guidelines, there are two non-credit score numbers that nearly all creditors also pay attention to.

Total Debt-to-Income Ratio

This is the measure of how much total debt you currently carry versus the amount of income you earn. The assumption on the part of the creditor is: The higher your income, the more debt you can carry because you are more likely to pay it off. In this ratio, they are paying attention to unsecured debt, like credit cards and outstanding lines of credit, and they may also factor in secured debt, like your mortgage. For example, if you have $50,000 in credit card debt and you make $50,000 per year, they can see that it will take an entire year’s worth of income just to cover your credit card debt. Or, if you have $500 in credit card debt and you make $50,000 per year, they can see that you have a much more favorable total debt-to-income ratio.

Debt Utilization Ratio

This is the measure of how much available credit you have compared to how much of that credit you’re using. So if you have a credit limit of $10,000 on one credit card and you have $1,000 in debt on that card, your utilization is 10%. (Of course, this is just for one card; they take into consideration all of your available credit and debt). The lower your utilization, the better, because it shows that you do not need to use all of your available credit.

These two numbers are important to creditors because they help show how much debt you are using and how able you are to meet your debt obligations with your current income. They use that information, along with your credit score, to help them determine your creditworthiness.

Armed with this information, you can help to improve these ratios by paying down debt, working on increasing your income, and increasing your credit limit. Although you can’t “game the system” by doing this, it’s helpful information for you to understand what factors are influencing your lender’s decision-making.

Image: Juipterimages

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team