what does dti mean

DTI stands for "debt-to-income ratio." It measures the share of your gross (pre-tax) monthly income that goes toward recurring monthly debt payments. You calculate it by dividing your total monthly debt payments (examples: mortgage or rent, auto loans, student loans, minimum credit-card payments, and other recurring debt obligations) by your gross monthly income, then multiply by 100 to get a percentage. ([experian.com](https://www.experian.com/blogs/ask-experian/credit-education/debt-to-income-ratio/)) Lenders use two common DTI measures: a front‑end (or housing) DTI that looks only at housing costs, and a back‑end DTI that includes all recurring debts. Lenders review your DTI to judge how comfortably you can take on new credit and to assess default risk. ([experian.com](https://www.experian.com/blogs/ask-experian/credit-education/debt-to-income-ratio/)) As a rule of thumb, many lenders consider about 35% or less to be strong, 36–49% to be workable but in need of improvement, and 50% or higher as a warning sign that you may have limited spare cash and reduced borrowing options. ([wellsfargo.com](https://www.wellsfargo.com/goals-credit/smarter-credit/credit-101/debt-to-income-ratio/understanding-dti/)) Ways to improve your DTI include increasing income, paying down principal on existing debts (especially high‑interest balances), refinancing loans to lower monthly payments, and avoiding new recurring debt while you prepare to borrow. ([experian.com](https://www.experian.com/blogs/ask-experian/credit-education/debt-to-income-ratio/))