The details
DSCR loans are more forgiving than conventional investor loans because they qualify on the property rental income, not your personal debt-to-income ratio. That said, every DSCR lender sets a minimum credit score, and most draw the line at 620. A handful go to 600 or even 580, but expect meaningful rate add-ons and lower maximum loan-to-value.
If your score is below the standard cutoff, you have three levers. First, a larger down payment reduces the lender risk and can offset weak credit. Second, strong cash flow helps: a DSCR of 1.25 or higher makes some lenders more flexible on credit. Third, a co-borrower or guarantor with stronger credit can get the file approved.
Before applying, pull your credit and fix what you can. Pay down revolving balances, dispute errors, and avoid opening new accounts. Even a 20 point improvement can move you into a better pricing tier. A loan officer can run a rapid rescore simulation to show exactly which changes move the needle fastest.
Run it yourself
Related loan programs
DSCR Loans
A DSCR loan is an investment-property mortgage that qualifies you on the property’s rental income divided by its monthly payment (the debt service coverage ratio).
Hard Money Loans
A hard money loan is a short-term investment-property loan from a private lender that approves mainly on the property’s value and the deal, not your income or credit history.
Bridge Loans
A bridge loan is short-term (usually 6–24 months) investor financing secured by real estate that “bridges” you from a purchase to a sale or long-term refinance.
Frequently asked questions
What is the minimum credit score for a DSCR loan?
Most DSCR lenders require at least 620. A few go as low as 600 or 580 with larger down payments and higher rates. Pricing improves noticeably at 680 and again at 720.
Does DSCR use my personal income?
No. DSCR loans qualify on the property rental income divided by the mortgage payment. Your personal income and employment are generally not verified, which is why credit score carries extra weight in the decision.
Can I get a DSCR loan with a recent bankruptcy?
Most lenders require 2 to 4 years after a bankruptcy discharge, depending on the chapter. A few non-QM lenders are more lenient with larger down payments. Foreclosures usually need 3 to 7 years of seasoning.
Will a low credit score raise my DSCR rate?
Yes. Credit score is one of the main pricing adjustments on DSCR loans, along with loan-to-value and DSCR ratio. The difference between a 620 and a 740 score can be 1 to 2 percentage points in rate.
What down payment do I need with bad credit on a DSCR loan?
Plan on 30 to 35 percent down if your score is below 620. Standard DSCR down payments are 20 to 25 percent for borrowers with 680 plus credit.
More answers
- Is there such a thing as a free mortgage?
- Can you get an interest-free mortgage?
- What is a no-closing-cost mortgage?
- What is the difference between lender-paid and borrower-paid compensation?
- What does “lender-backed” mean on a mortgage?
- Mortgage broker or bank: which is better?
- How is DSCR calculated for a mortgage?
- What DSCR ratio do I need to qualify?