M K asked:


Okay, so my husband and I graduated college in 2007 and started paying off our loans (70K total) about a year ago. Our monthly payments (combined) are about $450 a month. We make every (EVERY) payment on time, and always pay a little more than the minimum. The problem is that our combined income is about $72K a year, or $6000 per month. (We both make equal money and have equal loan payments every month on our separate accounts.)

We have absolutely no problem making the payments, and (monthly) this comes out to a relatively small chunk of our income.

But when I have my credit report analyzed through Experian (online), it says my debt-to-income ratio is at almost 100%, 99% of which is the student loan account. Apparently this is calculatedby comparing my total loan debt ($35K) with my income $36K). It also stresses that this negatively impacts my credit score.

But if I’m only paying about $225 a month on student loans, out of $3000 a month in income, and I pay the loan on time, every time, why does this lower my score?!?!?

This is a 20-year loan, and we want to buy a house in 2 years. I’m afraid this will affect our interest rates when we apply for a mortgage, but for the life of me I can’t understand why this would be the case.

Help?

Out Of Credit Card Debt