Debt to Income Ratio
This is a guest post from Debt Lead, who has a debt consolidation website by Kimberly Credit Counseling.
What is your debt to income ratio? If the percentage is greater than 36%, your credit score will be negatively affected because you are considered to have too much debt. This means credit card companies and banks will likely turn down your application. Each lender sets its own policy and while some might accept you, many others will only approve your loan if you have a ratio below 30%. The general rule of thumb is to keep your debt to income ratio below 36% if you ever want to get financing.
To calculate your score, you need to add up your monthly fixed expenses. These expenses include all debt such as: house payment or leases, credit card other revolving credit balances, car payments, alimony, child support, etc. […]
Original post by MoneyNing