Is credit important?
Posted by Marquita Scruggs
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Why is Your DTI Ratio Important?
According to credit.org, a DTI is often used when you apply for a home loan. Even if you’re not currently looking to buy a house, knowing your DTI is still important.
First, your DTI is a reflection of your financial health. This percentage can give you an idea of where you are financially, and where you would like to go. It is a valuable tool for calculating your most comfortable debt levels and whether or not you should apply for more credit.
Mortgage lenders are not the only lending companies to use this metric. If you’re interested in applying for a credit card or an auto loan, lenders may use your DTI to determine if lending you money is worth the risk. If you have too much debt, you might not be approved.
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Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the HRIS.
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