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Jamz310

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Car Loan = High Debt to Credit Ratio = Not Fair?
I received a car loan for the required amount needed to purchase a car. Now my debt to credit ratio for this one installment shot up to 82%. The loan amount is being used as my credit limit. That does not seem right. If this is the case the the only way around that is to apply for a loan way over the amount needed - which isn't what I needed. What's the deal?

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This is a simple fact of math, fair or not.  Total credit you have amount of credit used/total amount of credit lenders will give you.  I would not worry too much about it, unless for some reason you were trying to buy a house soon.  You should really take time to learn what things do to your credit scores before you make major decisions in the future so that you not be caught off guard. This helps as now you have more credit files, as well as different types.  In the long game, this loan will really help your credit score and allow you gain credit easier in the future as you show you are responsible enough to make payments over time.  After a year or so, maybe try to get some increases on your current credit cards to help with that usage side of your credit score.

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