Dangers of Credit Card Debt

• Credit card balances, or the amount of debt you owe, account for about 30 percent of your credit score. Having too much debt can bring down your FICO score and disqualify you for a mortgage loan.
  
  

Debt Ratio

• When determining whether a person qualifies for a home loan, mortgage lenders assess a borrower's debt ratio (monthly debt payments divided by monthly income). The chances of getting a mortgage decrease when your debt ratio (minimum debt payments including the mortgage) exceeds 36 percent.
  
  

Consequences of Credit Card Debts

• Lenders differ, and some will approve a borrower with high credit card balances. To compensate for high debts, lenders usually charge a higher interest rate and require a co-applicant.