Credit Tips – World Famous “Three-Legged Stool” Analogy

I’d like to give you my world famous “three-legged stool” analogy to help you forever understand credit easily.

There’s a lot of information out there about credit. You can get into a lot of complexities, but this little analogy is going to make it very simple to see where you’re at now, and how each different option will affect you – no matter what you do.

So imagine, if you will, a three legged stool…

And on this stool are these three legs because your credit is really made up of three main factors:

The first leg is your payment history. Your payment history is whether you pay your payments on time, if you have any past due accounts or this kind of thing.

Second leg on the stool is your debt-to-income ratio. That is how much debt service you pay, what you are obligated to pay each month towards debt verses your gross income each month.

The third leg on the stool is your debt-to-credit-limit ratio or “utilization”. How much your current balances are compared to your credit limits.

Next we are going to look closer at each “leg” of this three-legged stool individually, so you can gain more insight into how credit works.

So let’s take a look at each of these three legs, starting with the first leg…

>>> NEXT: First Leg: Payment History

Was this valuable to you? Feedback? Question(s)?

Please share your thoughts and ideas below. I respond to any questions posted as a comment in detail by email.

Thank you for the opportunity to serve you!

Here To Be An Asset To You,

Jesse Niesen
DebtGoToGuy.com
888-928-DEBT

Thank you for spreading the word!