Life has a way of throwing curve balls
So don’t be complacent about the important things in your life
Like your health, and your finances.
The best time to take stock and make adjustments is before crap starts happening.
So….
Get cracking!
Here’s a question for you…..
What’s your debt to credit ratio?
There are so many aspects to a good credit score
And people often wonder how much of their available credit they should be using in order to maintain healthy credit scores.
The truth is…
There’s no magic number
But there’s a formula.
Your credit to debt ratio is calculated by dividing your available credit by the total amount of your revolving debt.
Many experts recommend that we keep that number at 30% of your available credit at any given time.
But if you have too much available credit, it will count against you as well.
What’s important is that you monitor:
One: the amount of your available credit on your credit report – mainly, your credit cards, charge cards and store cards.
And two: the total amount of debt on your report.
According to US News, a debt ratio of 36% or less is healthy. And the general consensus among experts is to stay below 20%-30%.
So, if you earn $5,000 a month and have debt payments of $1800 per month (including rent etc.) you would be golden!
Another good rule of thumb is to keep the total amount of your available credit on all of your revolving accounts at five times the total amount of debt.
Too much or too little will hurt your credit scores.
The wise powers that be figured that if you have a lot of available credit, you might be tempted to overspend and incur debt that you’re not able to make payments on.
By and large, debt is not a good thing
And it behooves us to focus our energy on eliminating all “bad” debt.
So be proactive…. or continue to do so
Take control of your long-term debt and manage your debt to credit ratio.
Until next time…..
I look forward to hearing from you!!
Althea
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Yes… I’m a nurse, but did you know that I have a side hustle? I’ve partnered with a leading financial service company and the number one thing they do is credit restoration. We’ve helped many people since I started on this journey and always looking to serve more. Check out these links…. Fix Your Credit and Earn Extra Income.
My goal is to connect people, ideas, and resources so that your life is better because I helped you make the right connection!!
