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Size Up Your Situation

The following guidelines can help you assess where you are in your debt management. Remember that these are just a starting point to use as you set your financial goals.

  • Maintain a credit score of 700 or more to show good credit management.
  • Know how long it will take to repay debts making monthly payments.
  • Know the total amount to be paid over the life of credit obligations (how much you borrowed vs. how much you will pay overall).
  • Know the costs associated with making monthly payments, such as fees and interest.
  • Maintain a debt-to-income ratio of less than 20 percent.
  • Spend under 43 percent of take-home pay each month on fixed costs (expenses that don’t change month to month). This would include debt plus utilities, gym memberships and any subscriptions such as TV streaming services.

Use the Credit and Debt Plan Worksheet to see if you meet these guidelines.

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