This is where credit consolidation can be most helpful. To the extent that you can consolidate loans and credit card balances, your monthly payment should decrease and therefore, lower your DTI ratio. Remember, the DTI ratio is based on your monthly debt payments. It is NOT your total debt divided by your annual income. Therefore, smaller monthly payments result in a lower DTI ratio. Bear in mind that debt consolidation is not without its disadvantages. If you pay less each month (without a corresponding decrease in interest rate), your loan will take longer to pay off and probably cost you extra interest. If you do take a consolidation loan, you should swear off new credit until you repay the loan, lest you be caught in a debt spiral that ends in bankruptcy. Naturally, paying down your debt will immediately improve your DTI ratio. If you have unused assets you can cash in, you may be able to make a dent in your current debt. Perhaps you have a valuable stamp or coin collection gathering dust, or an antique or art piece you’d be willing to sell. Some folks may decide to downsize their homes to lower their monthly bills.