"I have credit cards with combined limits of just over $60,000. Surely that should give me credibility by demonstrating that others are willing to lend to me! Ive also proven that I can manage my payments by keeping a balance of around $58,000 - the interest on which I pay on time each and every month.

1. What two specific parts of Eric's situation above are likely the reason lenders are worried? Be specific and explain the implications of what youve noted.

2. You with Eric shopping for appliances at a local home center. A salesperson mentions that Eric can receive a zero percent loan on an appliance package if he opens up a store credit card.

Stressing his financial savvy, Eric notes that he recently negotiated the purchase of his car, his computer, and his big screen TV all with similar zero percent interest rate credit card accounts he opened for each purchase.

What specific component of Erics credit report is he inadvertently hurting? Explain the significance of his actions relative to that component and include your reasoning.