If you are receiving unsolicited phone calls from an entity pretending to be ACCC (a trusted non-profit credit counseling agency), please be assured that ACCC’s policy is NEVER to contact you unless you’ve explicitly requested us to call you. Also be cautious of emails from an unusual or unfamiliar domain. ACCC’s domain extension is @consumercredit.com, and any emails using a different extension should be treated with suspicion.

×

ACCC’s Client Login allows current clients to access their program information, including the due date, program benefits, and other documents.

Select a Client Login below based on the service that you are currently enrolled in:

Debt Management Program

Client Login

Bankruptcy

Pre-Bankruptcy Client

Post-Bankruptcy Client

Not yet a client, but looking to get started?

ACCC offers debt relief options to individuals and families that are suffering from stress related to credit card debt by providing effective credit counseling, helping to consolidate debt, and advising on debt management.

Get Started

Wait!

You are now leaving the Consumer Credit website and are going to a website that is not operated by ACCC. We are not responsible for the content or availability of linked sites.

Are you sure you want to leave?

No, return me to the previous page.

Yes

Tuesday Tip: How to Calculate Your Debt-to-Income Ratio

Do you know what your debt-to-income ratio is? Do you know why it’s an important figure? Well, lenders and credit reporting agencies will use this figure as part of the criteria for determining your creditworthiness. Our credit counseling advice is for you to work towards making it as low as possible. It could mean the difference between obtaining credit or not.

American Consumer Credit Counseling is here to de-mystify the debt-to-income ratio.

American Consumer Credit Counseling is here to de-mystify the debt-to-income ratio.

What is a debt to income ratio?

This figure is used by creditors, lenders, and credit reporting agencies as part of the formula to determine your creditworthiness. This is not the only criteria they use, but it is taken into account. Someone with a high debt-to- income ratio may be seen as a high risk, and may have trouble obtaining credit or a loan. If they do get approved, the terms may not be as favorable as someone with a lower debt to income ratio.

What is a good debt to income ratio?

You want your debt-to-income ratio to be as low as possible. Creditors will see a low ratio as evidence that you do not rely too heavily on debt to get by. This tells them that you are a good candidate should you apply for a credit card, mortgage, or other loan. A debt-to-income ratio of 35% or higher will likely be viewed as high-risk. A ratio of 20% or lower will likely be seen as low-risk. As stated above, the lower the better.

How do you calculate a debt to income ratio?

Total Monthly Debt Divided By Gross Monthly Income

Add up all of your monthly debt payments (mortgage, rent, credit cards, loans, car payments, etc.). Then divide by your monthly gross income (that is your income before taxes are taken out).For some help calculating your debt-to-income ratio, download ACCC’s free Debt to Income Ratio Worksheet.

Maybe lowering your debt-to-income ratio is one of your goals for the upcoming year. Be sure to take our poll to share you financial goals for 2015, and see the most common answers!

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

 

ABOUT AUTHOR / Andi

Andi is a Marketing Assistant at ACCC. He is passionate about supporting financial literacy efforts and helping to educate people on the Talking Cents blog!

View all author posts →

creditU

Your Ultimate Money Management App

Meet CreditU, the ultimate one-stop debt and financial management app! See your full financial overview, including debts, income, expenses, and savings.

CreditU Apple App Store
Dev Tool:

Request: blog/tuesday-tip-how-to-calculate-your-debt-to-income-ratio
Matched Rewrite Rule: blog/([^/]+)/?$
Matched Rewrite Query: post_type=post&name=tuesday-tip-how-to-calculate-your-debt-to-income-ratio
Loaded Template: single.php