Credit Q&A with Wells Fargo

I recently had the opportunity to chat with Erick Smith, a lending specialist based at a Wells Fargo branch in Portland, Oregon. My goal was to find out specifically which credit score Wells Fargo uses to estimate customers’ creditworthiness. He didn’t get as specific as I would have liked, but I guess that’s to be expected (financial institutions tend to keep their exact lending formulas close to the vest). He did, however, offer some interesting tips for anyone thinking of approaching Wells Fargo for a loan. Here’s what I found out:

The 20/10 Rule

Erick pointed out Wells Fargo’s advice to keep your total credit card debt under 20% of your total yearly income (after taxes). Don’t let more than 10% of your monthly take-home pay go towards your credit card payments.

Emergency fund

At minimum, have at least 15% of your credit card limits free in case of emergency. Of course, the better option Erick and Wells Fargo suggest is to stockpile three to six months of living expenses in a liquid, interest-earning account.

Communicate with creditors

While you hear plenty of horror stories from consumers saying their creditors have thrown them to the debt collection dogs, Erick says you should contact your creditor immediately once you start having problems making payments. Most creditors will work with you and possibly arrange alternative options for payment, especially if you tell them right away about your situation, he says.

Beyond your credit score

Lenders do look at your credit score, but they also look at factors not found on your credit report when deciding to grant you credit. These include your employment history, your relationship with that bank, and the amount  of debt they think you can handle based on your income. You can have a great score, but if your income can’t support a $200,000 mortgage, you won’t qualify for one.

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Check your credit

Erick advises anyone wanting a loan to check their credit report first. This will better prepare you for negotiations with lenders, as well as show you any errors that need to be cleared up or fraud happening in your name.


Erick J. Smith has been a Lending Specialist for six years with Wells Fargo, and he makes it a priority to know his customers and provide them with sound financial advice. His goal is to see every customer reach their financial goals. Previous to Wells Fargo, Erick worked at Bank of America and Washington Mutual. If you have further questions or would like to speak with Erick about getting a loan, you can reach him at or call him at (503) 886-3378.


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