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My Debt to Income Ratio is Enormous. – Laura

“Dear Steve,

My debt to income ratio is enormous. I pay bills on time, but do not have money left over for groceries much less anything else. I need to refinance my home because my ARM is up soon.

Would it be smarter to refinance now before I mess up my credit worse with a dept mgmt. program? I don’t know if my credit is ruined worse by a debt settlement or by my debt to income ratio. Please help.


Dear Laura,

No matter what the cause of your decreased credit score, the end result is the same thing, poor credit.

With a ARM needing to be refinanced in the near future you better make a serious effort to get your credit in shape.

First step will be to get a copy of your consolidated credit report and look to see what is really being reported about you. If you find negative and inaccurate information being reported, follow the instructions included in the consolidated credit report to get it removed.

With the stricter lending standards for mortgage today you might find it difficult to refinance with borderline credit. Once you tune up your credit report then I would contact a mortgage broker and talk about your refinancing options.

I don’t see any reason why you should be considering a debt management program at this time.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • i had two american express cards costing 195 dollars a year i never used them so i cancelled them does this effect my credit

    • Only in that, the lack of credit card activity can reduce your score because you are not demonstrating responsible use. However, if you have other cards that you are using and are open, that’s good. The cards that are best to leave open are the ones with the longest history of use.

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