Your debt-to-income ratio (DTI) measures how much of your gross monthly income is committed to debt payments. Lenders use it as a cash-flow check: even with great credit, a high DTI signals you may not have room for another payment.
How to calculate DTI
Add up all required monthly debt payments — rent or mortgage, minimum credit-card payments, auto loans, student loans, child support — and divide by your gross (pre-tax) monthly income. Multiply by 100 for a percentage.
Example: $2,400 in monthly debt ÷ $7,000 gross income = 34.3% DTI.
Lender thresholds
Personal-loan lenders generally cap DTI at 36%–43%. Conventional mortgages typically require DTI under 43% (some allow up to 50% with compensating factors). FHA loans are more permissive. Above 50% you're effectively locked out of most mainstream credit.
How to lower your DTI
Pay down high-payment debts (credit cards typically have the highest payment-to-balance ratio), refinance to a longer term to drop minimum payments, increase income, or add a cosigner whose income counts toward the application.
Frequently asked questions
Does DTI include my rent if I don't own a home?
Yes. Lenders include housing payments — rent or mortgage including taxes and insurance — in DTI.
Is DTI the same as credit utilization?
No. DTI is monthly payments vs income. Utilization is revolving balance vs credit limit. They're different metrics and lenders look at both.