Your credit score went up but you still got denied for a loan, and the reason is debt-to-income ratio (DTI), the number lenders actually use to approve a mortgage and the one most credit repair clients never see coming.

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The score gets your client noticed. The DTI gets them approved. So before you build a plan, ask every new client what they want to qualify for, what their timeline is, and what the rest of their financial picture looks like. Lead with the goal and you'll spot a denial before the lender does.

DTI is simple math that almost nobody explains to clients. Add up their monthly debt payments, divide by their gross monthly income, and that percentage is the number. Most lenders want to see 43% or below, though conventional loans can stretch to 45% or even 50% with strong compensating factors like great credit and cash reserves.

You move that number two ways, lowering the payments or raising documented income. Knocking out an installment loan with fewer than 10 payments left often gets the whole payment dropped from the calculation. Keep an eye on student loans, which can count against a client even in deferment. And when a big purchase is close, bring in a mortgage broker to run the exact numbers.

Tune in!

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Key Takeaways:

00:00 Intro

01:30 Why a Higher Score Still Gets You Denied

03:34 The Three Questions to Ask Every New Client

04:46 Credit Score vs. DTI. Two Different Numbers

05:56 How to Calculate Your Client's DTI

07:40 The Ground Rule. No New Debt Until You Close

08:40 Why Student Loans Hurt Even in Deferment

09:32 Two Levers That Move the DTI

10:52 Final Thoughts

Additional Resources:

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