Our portfolio company, GoalSpring Financial, has been working on the big idea of encapsulating your financial health in a small, digestible package for a while.  Most people are now familiar with what their credit score is – if not due to the credit crunch of the past couple years, then due to clever or annoying ads for services like freecreditreport.com.  But all a credit score will tell you is how likely you’re going to default on a credit offer in the next 12 months.  It doesn’t tell you if more credit is good for you, or if you’re going to be able to retire or pay for your next vacation.

So, our friends at GoalSpring have come up with the DebtScore.  It basically consists of two factors, an enhanced debt to income ratio and a grade for what that means based largely on your age.  The concept is that depending on your age – and other factors like college education – you are able to take on different levels of debt.  The younger you are, the more income generating years you have in front of you.  Later in life, you’re likely earning less and should consequently have fewer debt obligations.  Pretty simple, straightforward and much more powerful information than your credit score – for YOU.  Really, the only reason you care about your credit score is because your lenders care and you want to know – and perhaps tweak – what they’ll see.  The DebtScore addresses a key to your financial health.  It is for you.

It is, also, in production.  And it is incomplete.  For example, while the DebtScore can tell you whether it’s good for YOU to take on additional debt, or how bad your current situation is, it does not tell you if you have enough money to pay for emergencies – or, for that matter, for your dreams.  With financial freedom as the objective, the DebtScore gets you a long way there.

And I don’t mean to brag with my DebtScore or anything…