It might seem like keeping your debt low should guarantee a strong credit score – but that’s not always the case. In fact, it’s entirely possible to have a good debt-to-income (DTI) ratio while still having a low FICO score.
If that’s your situation, you’re not alone. And you’re certainly not out of options! Let’s take a closer look at how this combination can happen, what it may mean for your financial future, and how to strengthen your credit profile.
Quick Recap: What Are DTI and FICO?
Need to brush up on the basics? Here’s a breakdown:
Debt-to-Income (DTI) Ratio measures how much of your monthly income goes toward debt payments.
A low DTI (typically under 36%) means you’re not overextended.
Learn more in our Understanding DTI guide.
FICO Score is your credit score – a three-digit number ranging from 300 to 850 that lenders use to gauge your credit risk.
A low score (under 670) can make it harder to qualify for loans or get favorable terms.
They’re both key parts of your financial health, but they measure very different things. And while lenders will look at both metrics, they’re not directly linked to each other. Credit bureaus don’t usually know your income, so your DTI doesn’t directly affect your credit score.
How Can You Have a Good DTI and a Low Credit Score?
It’s more common than you might think. Here's how that combination can happen:
You’re debt-light, but credit-thin. Maybe you tend to pay in cash, don’t use credit cards very often, or don’t have any substantial loans. That keeps your DTI low — but it also gives credit bureaus less data to work with.
You’ve had past credit issues. Missed payments, defaults, or collections can drag down your score, even if you’ve since paid off debt and reduced your DTI.
Your credit history is short. A strong DTI today doesn’t erase the fact that you may not have much credit history, which counts for ~15% of your FICO score.
You have high credit utilization, even with low total debt. Using a large percentage of your available credit (e.g., maxing out a single card) can negatively impact your score, even if the overall debt is small.
Does It Affect Your Ability to Get a Loan?
It definitely can. Many lenders look at both DTI and credit score when reviewing applications.
Here’s how this combo might play out:
You may meet income and DTI guidelines, but still get denied due to credit risk concerns.
Your loan terms might be less favorable – such as higher interest rates, lower borrowing limits, or required co-signers.
You might not qualify for certain financial products, especially unsecured loans or credit cards that rely heavily on FICO.
In short: a good DTI is a strong foundation, but your credit score still matters.
Tips to Keep Your DTI Low While Improving Your Credit Score
You don’t need to take on more debt to boost your credit. Try these smart, low-risk strategies:
Make all payments on time Payment history is the biggest factor in your score. Even the little bills matter.
Lower your credit utilization ratio Aim to use less than 30% of your available credit before making a payment – ideally under 10% for maximum impact.
Keep older accounts open A longer credit history boosts your score. Don’t close old credit cards unless absolutely necessary.
Use a secured credit card or credit builder loan These tools can help you build positive credit without taking on major risk.
Check your credit report regularly Mistakes happen. Keep a close eye and dispute any errors that could be dragging your score down unfairly.
Why Your DTI & Credit Score Matter
If you’ve got a good DTI, you’re doing something right. You’re living within your means, managing debt responsibly, and that’s a great position to be in.
But improving your FICO score unlocks more doors: better loan options, lower interest rates, and greater financial flexibility. Fortunately, building credit doesn’t require changing your spending habits! Just a few smart steps and a little consistency.
Want to learn more about how lenders view your financial health? Check out our full guide to Understanding Your DTI and stay tuned for more credit-building tips.
Disclaimer: This content is for informational and educational purposes only and does not constitute financial, legal, or lending advice. Loan terms and availability vary by lender and state. Consult a qualified financial professional or lender for personalized guidance tailored to your situation.
Unison Mortgage Corp NMLS ID 2574289
About the Author
Unison
We're the pioneers of equity sharing, offering innovative ways for you to gain access to the equity in your home. For more than a decade, we have helped over 12,000 homeowners to pursue their financial goals, from home renovations to debt consolidation, retirement savings, and more.
