Just because you can borrow money doesn't mean you should. Live your life in a way that minimizes your need to take on debt. That means living on less than you make, when debt is necessary use less of it that lenders are willing to give you.
Total your monthly debt. Include your house and car payments, student debt and credit cards. Take your annual salary before taxes and divide by 12 to determine your pretax monthly income. Divide your monthly debt by your pretax monthly income:
If your ratio is under 20% your in good standing, 20-36% is a good debt load because lenders still consider you credit worthy if you're credit score is in good shape, 37-43% debt danger zone meaning your debt is higher than recommended.
5 steps to escaping danger zone:
Don't spend unless you have it
Make a plan and stick to it
Establish an emergency fund
Find extra cash-sell something
Lower your rates-interest builds quickly
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