What Is a Good Debt-to-Income Ratio? (US)

By Hamid Ali, Founder of DebtShift · Updated October 16, 2026 · United States

The lender says your income is fine and your credit score is fine, and then says no.

Short answer: Debt-to-income ratio (DTI) is your total monthly debt payments divided by your gross monthly income. There is no single “good” number: the CFPB says limits differ by loan product and lender. A 2026 St. Louis Fed study found mortgage denials stay roughly flat between about 20% and 50%, then jump at 50%. Free nonprofit help: nfcc.org or 877-360-6322.

Based on the CFPB and the St. Louis Fed. This is for the US. For loan-program limits read US mortgage DTI limits, and see the US debt relief hub for every debt route.

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How it is worked out

The CFPB defines it as all your monthly debt payments divided by your gross monthly income, which is your pay before taxes and other deductions. Its own example: $1,500 mortgage, $100 auto loan and $400 other debts is $2,000 a month. On $6,000 gross, that is 33% (CFPB).

What the denial data shows

The St. Louis Fed looked at Home Mortgage Disclosure Act data on more than 30 million home-purchase applications from 2018 to 2024. It found denial rates roughly flat at 8% to 10% between about 20% and 50% DTI, no meaningful jump at 43%, a jump of roughly 15 to 17 percentage points at 50%, and denials above 80% over 60% (St. Louis Fed). The authors link the 50% line to institutional practice, including the end of a temporary exemption for Fannie Mae and Freddie Mac in 2022. That is a pattern in past applications, not a promise about yours.

A worked example

Our own illustration, not a quote. Gross income is $5,000 a month. Existing payments: car $350, student loan $200, card $100. That is $650, or 13.0% ($650 ÷ $5,000). Add a $1,500 new housing payment and the total is $2,150, or 43.0%. Clear the card and it falls to $2,050, or 41.0%.

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Where to go next

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Straight answers to the follow-ups

Is 43% a good debt-to-income ratio?

It is a common line, not a rule of nature. A June 2026 St. Louis Fed study of more than 30 million mortgage applications found no meaningful jump in denials at 43% and a jump of roughly 15 to 17 percentage points at 50% (St. Louis Fed). The CFPB says different loan products and lenders have different limits (CFPB).

Does rent count in my DTI?

The CFPB’s definition is all your monthly debt payments divided by gross monthly income, and its example includes a mortgage payment (CFPB). For a mortgage application the lender counts the new housing payment. Read US mortgage DTI limits.

Is DTI the same as credit utilization?

No. DTI compares monthly payments with income. Credit utilization compares card balances with card limits. They are separate numbers. See what is a good credit score.

Does DTI affect my credit score?

No. Your income is not on your credit report, so DTI is not part of the score. Lenders calculate it themselves from what you tell them and what your report shows.

My DTI is too high. What is the fastest fix?

Remove monthly payments. In the illustration above, clearing the $100 card payment moves the ratio from 43.0% to 41.0%. Raising income helps too. Try ways to find extra money and the AI debt payoff planner.

Where can I get free help if debt is crushing me?

The NFCC offers free nonprofit credit counseling at nfcc.org or 877-360-6322 (NFCC). If you are weighing bigger options, read consolidation vs settlement vs bankruptcy.

Disclaimer: DebtShift is an educational platform operated by H Ali Logistics Ltd. This article is general education, not legal or financial advice. For free, nonprofit credit counseling, contact the National Foundation for Credit Counseling (NFCC) at nfcc.org or 877-360-6322.

Sources

Last reviewed October 2026