 TITLE: What Counts as Income on a Credit Application? CONTENT: Do All Creditors Consider Your Income and Debt?\n-----------------------------------------------\nMost creditors want to be sure—and many are required by law to verify—that you can afford to make your debt payments. Your income is part of the equation, along with your other outstanding monthly financial obligations.\nCreditors may use this information to calculate:\n*   **Debt-to-income ratio (DTI)**: Your DTI compares your gross monthly income and all your monthly debt payments. Different types of lenders will review your current DTI and how the new account would affect it. There may be a maximum allowed DTI—such as 43% for qualified mortgages.\n*   **Payment-to-income (PTI) ratio**: Auto lenders may consider your DTI and PTI ratios. The PTI ratio shows how much of your monthly income goes toward your car payment and estimated insurance premium. Lenders may set a 15% to 20% maximum PTI.\nA higher income and lower payments lead to lower ratios—which is best when you're applying for credit. END