Debt to Income Ratio

Your debt to income ratio is an indicator of your current level of indebtedness and the potential you may have to fall into future debt problems.

Add together all of your monthly payments (mortgage, rent, credit card payments, car loans, and any other credit or loan commitments), then
Add together your total gross income. (salary, alimony, bonuses, other income) and divide by 12
Then divide your debt by your income


Now ladies and gentlemen, the results:

0 - 36%: Congratulations! You have no debt problem
37 - 50%: Caution! You may be approaching debt problems if debt is not managed well.
A debt to income ratio of 50% or greater indicates that you do have a debt problem and should seek the assistance of a Certified Credit Councilor immediately.
The United States Trustee Program states that clients typically have an 80 percent debt to income ratio before they seek credit counseling.

Debt Warning Signs

In addition to your debt to income ratio, there are several warning signs that it may be time to seek help from a Certified Credit Councilor:

Debt avoidance: you don't know how much you owe and have been avoiding sitting down to find out
You have begun to receive less than polite calls or letters about delinquent bills
You have been unable to re-negotiate terms with your creditors
You have used your savings or IRA to pay monthly bills
You sign up for every credit card offer
You engage in the ¹credit card shuffle', obtaining a new card to pay off your existing card
You have been paying the minimum for extended periods of time
You are at the limit on all of your credit cards
You use your credit card for necessities like food or gas
Your credit cards have become a necessity rather than a convenience because you have no money
If you recognize yourself in the above descriptions, you may want to relieve the stress that uncontrolled debt causes and contact a Certified Credit Counselor today. Being honest with yourself by recognizing that you have a debt problem is the first step toward solving it.

Debt Comparison

Some debt statistics published on the Internet are misleading. A popular misconception is that on average, Americans have almost 3 credit cards, 4 retail credit cards, and 2 debit cards. That’s almost 9 cards per cardholder amounting to an average $8,000.00 of credit card debt per household.

However, the last published statistics by the US Federal Reserve on family finances indicated something much different:

In reality, most Americans owe nothing to credit card companies.
Most households that carry balances owe $2,000 or less.
Only about 1 in 20 American households owes $8,000 or more on credit cards.
23.8% of American households have no credit cards at all -- no bank cards, no retail cards, nothing.
Another 31.2% of the households the Fed surveyed paid off their most recent credit card bills in full.
So together, the households that owed nothing on credit cards equaled 55% of the total.
According to the Federal Reserve, 43% of American families spend more than they earn. Other independent studies maintain that over-spending American families spend $1.22 for every dollar they earn.

Read more about Average family debt from January 1943 to May 2005: US Federal Reserve Board: Family Finances




Credit Secrets Bible ! The #1 Credit Course In America Click Here!

Everything You Know Is Wrong! About Being Debt Free That Is!! And It Will Keep You In Debt The Rest Of Your Life! Click Here!

Credit Repair Secrets Revealed! Credit Repair Is A Hot Topic Click Here!

Guaranteed Bad Credit Financing. Receive A Loan Or Credit Card Even With Bankruptcy!
Click Here!

Living On A Dime - Financial Independence Through Better Life Choices. Publisher Of E-books About Paying Off Debt, Saving Money, Frugal Cooking And Homemaking. Click Here!

Eliminate Debt Fast Without Bankruptcy Or Debt Consolidation. Click Here To Learn The Amazing Secrets Of How I Got Rid Of $63,000 Of Debt In Only 4 Months Without Filing Bankruptcy Or Using Any Type Of Debt Consolidation Service! Click Here!

My Miracle Loans Learn How To Easily Borrow Up To $1 Million Cash In Less Than 7 Days All With No Credit Check, No Collateral, No Proof Of Income, And No Interest Fees! Click Here!

Bad Credit Personal Loan Source. Bad Credit Personal Loans Regardless Of Bad Credit - Up To $25,000. Click Here!