Credit Score Does Matter on DSCR Loans. Period.

[Chris Seveney]

I recently heard someone say credit score does not matter on a DSCR loan because "it's based on the property." That is incorrect.

Yes, DSCR evaluates the property's cash flow. Rent divided by PITIA determines whether the deal qualifies.

But that is only part of the equation.

Credit score directly impacts:

• Interest rate

• Points

• Max LTV

• Cash-out eligibility

• Reserve requirements

Every DSCR lender has minimum FICO requirements. If credit truly did not matter, there would be none.

Also, if you are working with a "private lender" offering DSCR financing, in most cases they are not keeping the loan. The cost of capital for most individuals is higher than DSCR rates. These loans are typically sold to institutional buyers or securitized.

The originator makes money on yield spread and points, similar to a traditional mortgage lender.

And the institutional buyer absolutely cares about credit score. Pricing and leverage are adjusted by FICO tier.

Two investors. Same property. Same DSCR.

780 credit score and 635 credit score will not receive the same terms.

DSCR is property-driven. It is not borrower-irrelevant.

Credit is leverage..

[Janice Carter]

Chris, well said. DSCR is property focused but it is absolutely not credit blind. As a broker, I can confirm that FICO directly affects rate, LTV, pricing, reserves and overall loan structure. Two borrowers with identical DSCR ratios but different credit profiles will not receive the same terms. The property qualifies the deal but credit determines the leverage and cost of capital.