Humans are wonderfully complex — which is why it would be so difficult to sum up anyone in a single word or judge them based on a single quality they possess.

Well, it turns out financial health is similar in that respect. There’s no single metric that truly captures every facet of financial health. It’s more helpful to think of personal financial health as a multi-dimensional, evolving sum of many different parts.

Want to give your financial health a routine check-up? Here are five ways to assess it. 

Credit Score

Your credit score is a distillation of your credit history at a glance. Lenders use it to determine your creditworthiness, which comes into play anytime you apply for a loan — and in some other situations, like taking out an insurance policy or submitting an application for an apartment.

This number will typically range from 300 to 850, but you’ll want to aim for a score of 670 or higher to stay in the good-to-excellent range.

What goes into your credit score? Here are the five leading factors making up this rating:


  • Payment history (35 percent): Your track record of making on-time payments.



  • Credit utilization (30 percent): The percentage of available credit currently in use.



  • Credit history length (15 percent): The longer, the more trustworthy.



  • Types of credit (10 percent): Your mix of installment credit, like credit cards, auto loans, mortgage, etc.



  • New Credit (10 percent): How many new accounts you’ve applied for/opened recently.


The good news is that you can actively work on raising your credit score by using credit responsibly, making payments on time, keeping utilization below 30 percent and keeping old accounts open.

Debt-to-Income Ratio

The same amount in debt can mean vastly different things to different people. This is why it’s more helpful to compare debt and ratio directly; it provides a frame of reference on the degree to which debt is healthy and under control.

Discover your debt-to-income ratio (DTI) by dividing all your monthly debt payments by your gross monthly income. The highest DTI you can have while still getting approval for a qualified mortgage is 43 percent. However, many experts agree it’s healthier to keep your DTI at or below 36 percent.

One sign your DTI may be getting out of control is the inability to keep up with monthly payments. As these Freedom Debt Relief reviews outline, some people decide to pursue a strategy like debt settlement to get their debt levels back under control. Others find success through debt consolidation, debt management, bankruptcy or do-it-yourself repayment methods. The worst thing to do when your DTI is too high is nothing.

Net Worth

Net worth provides a comprehensive overview of how much you’re worth, or your assets minus your liabilities. It’s useful to audit your net worth once per year so you can measure your overall progress over time. Ideally, your net worth is positive and keeps increasing over time as you set and achieve money-related goals.

Emergency Fund

Although it can seem daunting to set aside extra money each month, having an emergency fund is an important buffer against having to take on debt when an unexpected expense rears its head. About 28 percent of U.S. adults currently lack any emergency savings.

It’s something we can all work to increase over time — and is an important part of any financial health check-up.

Retirement Fund

Retirement may be just around the corner or feel light years away. Either way, it’s important to be saving for this momentous occasion. Setting up automatic deposits into an Individual Retirement Account (IRA) is an important part of strengthening your financial future.

Keeping tabs on these five areas can help you measure your overall financial health over time.

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