Can you have more credit than your annual income?

2 minutes minutes read

The credit limit you get is a mystery until you know all the variables that affect this number. Your credit report has a major impact on the credit limit you have, but what about your income?

Does my income matter?

Your credit report does not include your monthly, annual or any income at all, but the credit lender gets your income information depending on the type of credit you request. For example, if you are applying for a credit card, usually you put this amount on your application.

This is important because the amount of your income determines how much debt you can carry. Having a steady source of income is an appealing factor for lenders as you can constantly be repaying a certain amount of debt.

The moment of truth

Some creditors take a look at your Debt to Income ratio (DTI) which is calculated by dividing your total monthly debt by your gross income (monthly). A percentage below 36% is well seen by creditors.

In conclusion

In conclusion, your credit limit will always have a roof, which is your income. If you can’t afford to pay more than “X”, that is going to be the limit of your credit.

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Arturo Mendez

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