It’s a good idea to know your credit score and how that number will affect you. If you’re buying a house or a car, your credit score helps lenders know what interest rate you should be charged – the higher your credit score, the lower the rate you can earn. However, while the credit score is important, it only tells a part of your financial story.

There’s a second score you should know about and understand how it relates to your financial well-being – your debt score. Your debt score is how much of your income has to be used to pay off debt. The higher your debt score, the more debt you have. You can’t rely on your credit score to tell you when to stop spending, but learning your debt score can help you think twice about buying on your credit card. Plus, lenders may use your debt score in lending decisions, so if you don’t know it, you’re “flying blind” while shopping for loans.

The simplest way to remember the difference between the two scores is this: a credit score shows whether you can borrow money; a debt score shows whether you should borrow money.

How much debt should I have?

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