Credit cards first entered my life during my freshman
year of college. My first plastic way of paying for
things gave me a credit line of $500. The closer that
I got to that maximum amount, the more the limit increased.
It is now years later and I’m lucky to even
have a $500 balance on my cards. I’m in debt
beyond belief. Though I seem to owe everyone in the
world some sort of money, I haven’t ever had
problems paying my bills. I may only be able to make
my minimum payments, but at least I’m able to
pay anything at all. I have an excellent credit score
and I intend to keep it that way.
At 26 years of age, I attempted to buy my first home.
I went FHA and figured that my income would be decent
enough to be approved. My mortgage consultant took
all of my personal information and after doing some
figuring, informed me that my debt to income ratio
was too risky for any lenders to want to give me money.
I was shocked. I’d never made a late payment
in my entire life and had a great credit score. All
I wanted to do was buy a tiny house and I couldn’t
because of my debt to income ratio. I was furious.
Of course, I don’t blame the lenders. Between
my credit card balances and student loans, I wouldn’t
loan me any money either. As embarrassing as it was,
I had to get my father to co-sign a loan for me so
that I could be approved for a mortgage. My consultant
told me that I needed to really dig into my financial
situation and figure out how to make my debt to income
ratio much more appealing to lenders. I wasn’t
sure how to do that, but I intended to find out how.
I moved into my house, happily, and started to focus
on how I could decrease my debt. I started to nail
my credit cards before anything else because of the
interest rates. Even if I could only afford to send
an extra $10 each month, at least I was making a tiny
dent in my debt to income ratio. I transferred my
highest balances and interest rates to 0% interest
rate cards so that I could pay off more per month
than I was before. By saving about $40 per month from
not having interest rates, my balances actually began
to fall. It was a slow process, but worthwhile.
Three years later, I was looking for a larger house
and to move up in the world. Since my debt to income
ratio was more under control, I was able to qualify
without having a co-signer. That was the happiest
moment of my life. Figure out what your debt to income
ratio is and attack it. Don’t let it hinder
your future.
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Stop spending beyond your means and get on a debt
recovery diet
Lower, middle, upper-class; it doesn't really matter.
We all tend to spend beyond our means. And even though
we know we shouldn't, we generally slap another material
item on the credit card simply because we want it.
It's like a sickness or addiction of some kind. But,
there comes a time when enough is enough. Suddenly
debt recovery is the only thing on your mind. I hope
you're at that point right now.
