Sometimes, when you’re making progress, certain things move in opposite directions. Other times, everything moves in the same direction.
Martha L.’s success story incorporates a little bit of both.
Martha had a 541 credit score when she enrolled in the CredEvolv platform. She began paying down her credit card balances, which improved her debt-to-income ratio (or DTI) and pushed her credit score upward. Meanwhile, her credit counselor – who was working with her in lockstep, pulling in the same direction – was able to have a late payment deleted from her credit report.
Their combined efforts resulted in Martha’s score reaching 663, well above her and her lender’s goal of 620!
Why does DTI matter when you’re trying to get a loan?
Lenders look at your debt-to-income ratio to gauge how much of your income is already tied up in debt payments. A lower DTI signals to lenders that you have room in your budget to take on more debt without overextending yourself. On the other hand, a higher DTI might raise red flags, suggesting you could struggle to manage additional monthly payments.
In general:
- A DTI below 36% is considered good and indicates you have a manageable level of debt.
- A DTI between 36-49% is acceptable but may make it harder to qualify for some loans or the best interest rates.
- A DTI above 50% could limit your borrowing options and indicate that you’re at risk of becoming overwhelmed by debt.
Should you try to fix your credit yourself?
As we’ve pointed out in previous CredEvolv success stories, and as Martha’s story illustrates, the collaboration between our clients and the counselors we connect them with on our platform is the key to success. That’s why we never recommend attempting your own credit fixes. There are many ways you can mess things up when you try to clear your own credit record.
Improving your credit isn’t rocket science. It’s also one of those things that is best left to the experts. Specifically, the credit counselors on our platform. That’s because:
- They know what they’re doing.
- They have your best interest at heart.
- They’re not here to keep you in a program for longer than you need to be.
- They’re not out to make a profit off your hard times.
They’re here to coach you to success and show you the responsible credit practices that can improve your life. These improvements occur while you’re enrolled in the program, and they can remain for years to come after you’ve achieved the credit score you want and deserve.
Read more credit success stories here!