Lenders have different criteria for debt percentage. If you havent had credit very long don't open an associated with new accounts in a rush. These ratios are referred to as Front Ratio and a back ratio. Figuring out exactly how to read a credit report can be quite challenging if you have no idea what you're looking at. Each of the three major credit reporting agencies have different ways of reporting the information, but mostly have the same categories that they report on. If you don't already have an installment loan on your credit reports, you might want to add a small personal loan that you can pay back over time. You'll want the loan to be reported to all three bureaus, and the best deal can probably be got from a community bank or credit union. Fix it. Remove all the crud off your credit report by first getting a FREE report from one of those amazing companies that gives you one with no fees. Then... Write all creditors who have bad stuff on your report and ask them to take off any inaccurate or illegal dings. This means that this particular account went past 120 days since the last payment was made. After this happened the creditor decided to charge the account off, which will give them a tax break for bad debts. If that particular company doesn't have a large in house collection team, they will usually either assign it over or sell it to a bill collector. Many factors go in to the computation of your FICO score. Many people do not like . What you will find out is that they are not really searching for is a personal loan revolving or installment but for something else. Your FICO score is a personal loan revolving or installment an average of the scores that the three major credit bureaus have on record, Equifax, Experian, and TransUnion. These bureaus store consumer credit histories by the millions, and hundreds of thousands of businesses tap these bureaus for their data about you. Helpful tips: Whenever you're shopping for the best mortgage and auto loans, make sure you apply for these loans within a 30 day time period. By doing this your score will not be affected by "multiple inquiries" and will count only as a single inquiry on your credit report. Also, when you personally request your credit report it will not affect your score as long you order it directly from a CRA. Your payment history is the largest portion of your score at 35%. This means that it is vital for you to make at least the minimum payments, on-time, every time. A potential lender wants to see that you will hold your end of the bargain in paying back the loan. A clean payment history is one way to show this, even if it is not completely paid-off. If you have been late on a few payments, start making them on-time and you will see a steady increase in your score. The back end ratio is used most commonly in non-conforming and conventional mortgages. I have seen borrowers with a 75% back end ratio get approved with other factors being present such as plenty of liquid assets, job time, low LTV and so on. So if your ratio looks a little high you may be OK as long as the other pieces of the pie look good. If not, you may be looking at a stated documentation loan. Make sure all line of credit or revolving credit accounts are reporting your payments as installment payments on an "installment" loan. If not, change the loan to an installment loan, because they report better than revolving credit loans. Secured Credit Card - These types of credit cards, are usually used with people that have little or no credit established. These don't hold quite as much weight as an unsecured credit card, but are still effective at building a credit file. They will typically require a cash deposit that will secure the credit card to protect against a default of payments. Some secured credit cards will also require an application fee that is separate from the cash deposit to secure the card.