topic How do you determine your Debt To Income Ratio in General Credit Topics

How do you determine your Debt To Income Ratio

JMills — Thu, 07 Nov 2013 16:02:50 GMT

I heaar this a lot , does anyone have a formula and please explain me the overall process in how it is calculated.

Thanks in Advance

Re: How do you determine your Debt To Income Ratio

mxp114 — Thu, 07 Nov 2013 16:06:40 GMT

Read this for good insight: http://learn.bankofamerica.com/articles/managing-credit/keeping-your-debt-load-manageable.html

DTI calculator:http://www.bankrate.com/calculators/mortgages/ratio-debt-calculator.aspx

Re: How do you determine your Debt To Income Ratio

injustifiiable — Thu, 07 Nov 2013 16:12:00 GMT

It's your monthly recurring debt divided by your monthly income.

For this, they usually just consider the minimum payments on credit cards here.

Say you owe $1500 a month and make $4000 a month. DTI would be 37.5%. (1500/4000 = 0.375 x 100 = 37.5)

Re: How do you determine your Debt To Income Ratio

RobertEG — Thu, 07 Nov 2013 18:09:09 GMT

FICO scoring is based on balance to CL for revolving credit, and balance to loan amount for installment credit.

Total debt (which includes unreported accounts) and income are unknown to FICO, and are not scored.

Percent util of revolving credit is weighted much higher than balance remaining on installment loans, and is the primary scoring factor.

Debt to income is evaluated separately by creditors, usually for higher principal requests for credit, such as mortgages, and goes beyond FICO risk analysis.