Innovative App De-Mystifies Debt-To-Income Ratios Helping To Enhance Your Credit Scores
By Kamau Austin
Timothy Griggs, an accomplished entrepreneur in mortgages and real estate, is troubled with how debt hinders or marginalizes even his potential high income clients looking to buy real estate. According to an Oct 2019 article Of Make It On CNBC "Real estate is still the best investment you can make today, millionaires say...". Timothy is moved to create a tech solution to current credit and wealth creation problems.
Griggs is the Founder of The Good Steward, financial system (TGS), a mobile app that helps subscribers keep on top of their financial affairs. He is a mortgage broker with over 20 years experience and real estate investor. And his tech innovation is a timely tool for those looking to drive insightfully on the road to financial success.
Griggs often alludes to the fact that whether you are looking to buy your 1st home or rental properties you have to watch your debt-to-income ratio (DTI). Of course developing a good debt-to-income ratio is essential to utilizing a viable credit score and therefore geared towards buttressing financial success for most of us in the process.
Griggs is the Founder of The Good Steward, financial system (TGS), a mobile app that helps subscribers keep on top of their financial affairs. He is a mortgage broker with over 20 years experience and real estate investor. And his tech innovation is a timely tool for those looking to drive insightfully on the road to financial success.
Griggs often alludes to the fact that whether you are looking to buy your 1st home or rental properties you have to watch your debt-to-income ratio (DTI). Of course developing a good debt-to-income ratio is essential to utilizing a viable credit score and therefore geared towards buttressing financial success for most of us in the process.
However, understanding the protocols and algorithms on credit scores and debt-to-income ratio calculations is a mystery to many people. Nevertheless, app visionary Timothy Griggs, looks to demystify and harness the protocols and algorithms that inform debt-to-income ratios, credit scores, and ultimately mortgage/loan approvals to empower you towards your financial goals.
However, before we can truly appreciate what Timothy Griggs, and his TGS app, brings to the table let's take a look at how debt can hurt or help you.
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Video & Article On Timothy Griggs Founder of The Good Steward, financial system (TGS) Continues Below...
Is All Debt Bad?
Most financial experts agree there is good debt and bad debt. Undisciplined or clueless usage of credit card debt isn't wise but debt for a home, rental property, expansion of a business, or education can be a good investment.
In other words debt for beneficial monetary or financial purposes are usually better forms of debt while debt for more consumerism purposes works against you especially credit building wise. Allow me to illustrate my point from a view of macro-economics. There is a method to my madness.
For instance the national debt has traditionally been seen as a series of budget deficits.
In other words the US government spends more money than it collects in taxes (I know, hard to believe right?) In the last 90 years according to Forbes Magazine, the US government has been running in debt or budget deficits 77 times.
It usually runs a deficit according to Forbes under both the dems or GOP political parties. In a recent article on the Forbes Advisor, it states "It’s more common than not for the government to run a deficit, regardless of which party is in charge. In fact, the government has run a deficit for 77 of the past 90 years and first carried debt after the Revolutionary War in 1790."
However economists differ on whether national debt is good or bad. NPR.org conveys "But debt is not necessarily all bad; as with households and companies, it depends on what you are doing with the money you borrow. For example, it can make sense for you to borrow money to pay for college or professional school, because higher education increases your lifetime earning potential. For many people, the increase in expected earnings more than compensates for the cost of the debt."
So some economists believe if national debt is used to do things like upgrade highways and infrastructure, finance business growth, springboard new technological advancement and fund well thought out social programs which eventually jump-start consumer spending (economist Robert Reich, claims about 70% of the US economy is consumer spending) it is debt well spent.
Investopedia claims "When debt is used to fund economic expansion, current and future generations stand to reap the rewards. However, debt used to fuel consumption only presents advantages to the current generation."
Presently, there is a great amount of controversy because in February, 2022, it was announced that the national debt hit a record breaking $30 trillion dollars. This sent shock waves throughout the financial and investment communities.
For example CNN Business revealed, in its February 1st post America's national debt surpasses $30 trillion for the first time "Total public debt outstanding is now above $30 trillion, according to Treasury Department data published Tuesday. Why did the government borrow so much money?
Government borrowing accelerated during the Covid-19 pandemic as Washington spent aggressively to cushion the economic blow from the crisis. The national debt has surged by about $7 trillion since the end of 2019."
The national debt, usually funded with government issued bonds and other financial securities, can get complicated for most people to understand without study and research into how it works.
Likewise in terms of personal debt many people don't understand how it impacts your credit score and can derail your financial and investment goals like home ownership or access to capital. Let's now look at what is a debt-to-income ratio?
What is a debt-to-income ratio?
Consumerfinance.gov, describes your debt-to-income ratio as "Your debt-to-income ratio (DTI) is all your monthly debt payments divided by your gross monthly income. This number is one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow."
Then the digital government website goes on to illustrate "Different loan products and lenders will have different DTI limits. To calculate your DTI, you add up all your monthly debt payments and divide them by your gross monthly income. Your gross monthly income is generally the amount of money you have earned before your taxes and other deductions are taken out. For example, if you pay $1500 a month for your mortgage and another $100 a month for an auto loan and $400 a month for the rest of your debts, your monthly debt payments are $2,000. ($1500 + $100 + $400 = $2,000.) If your gross monthly income is $6,000, then your debt-to-income ratio is 33 percent. ($2,000 is 33% of $6,000.)"
How debt-to-income ratios impact your credit scores
The 2 major scoring systems now that determine your credit score are FICO, a publicly traded company, that most credit bureaus and traditional lenders use and VantageScore, a more current technology driven company. John Ulzheimer, a nationally recognized credit expert, with over 30 years working in the credit industry including working for FICO, Equifax, and Credit.com sheds some light on the credit scoring system and debunks the myth that all personal debt is bad.
He makes the point that having "installment debt" paid in a timely fashion does not reflect badly on your credit score and more importantly your debt-to-income ratio. Installment debt is debt paid on cars, mortgages, business loans, etc.
However, what is known as revolving debt loan on credit cards is viewed as more "predictive" of your risk in paying back a mortgage or bank loan. Ulzheimer, then suggests you stay below 10% of your credit limits on all your credit cards to not hurt your credit scores.
The three major credit reporting agencies (CRAs) are Experian, Equifax, and TransUnion. John Ulzheimer and other credit professionals reveal that your credit score is determined in the following ways:
- 35% is determined by your payment history
- 30% is calculated by your credit utilization
- 15% is evaluated by your credit history length
- 10% is determined by your credit inquires
Another thing that can affect your credit are debt settlements according to credit vlogger Nicholas Lasala. As you can see the debt-to-income and credit scores are complex and not easy to be aware of on a need to know basis until now...
Enter entrepreneur Griggs and his Good Steward Financial System App. His passion has driven him to develop a cutting-edge app that will help put the tools of wealth creation at your fingertips.
The tech and finance innovator conveys "he is passionate about helping to get people out of revolving debt and increasing their credit scores."
Timothy Griggs', Good Steward Financial System, is developed to help poor, low income, and aspiring wealth builders navigate the challenging credit and financial algorithms and systems along the path of decreased debt and towards the direction of wealth creation. The Good Steward Financial System (TGS financial System) can help you with the following functionality:
- Manage your credit cards by accessing your credit profiles and financial accounts
- Calculate your debt to income ratio with the TGS platform's tool to help analyze and control your debt.
- Monitor your credit rating with access to the various TGS tiered programs connecting to the credit bureaus
- Review your spending habits
- Protect your identity and digital profiles with the TGS Financial System's Identity Restoration Service
Timothy Griggs, obviously has very ambitious and insightful plans to make his TGS Financial System, even more impactful in helping others reach financial success. He is even developing a debit card that will help people build their credit scores.
He is a financial pioneer on a mission to help us become good stewards of our financial resources and ultimately create the opportunity for broader wealth creation in our society. The TGS app is available for download to your Android or Apple device by visiting: TGSisTheGoodSteward.com
Writer's Bio: Writer Kamau Austin, is the award winning Publisher of the Black News Scoop and Scoop Publications, a division of AMS Digital Media. He is a long time activist, entrepreneur, and author. Austin has been featured in Black Enterprise, Fortune Magazine Small Business, CNN, radio, cable, and countless newspapers and blog sites.
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