You can still be denied a car loan even with a great credit score – the DTI rule is crucial to know for all drivers

A HIGH credit score doesn’t guarantee drivers a car loan.

A car salesman with nearly 80,000 TikTok followers revealed the rule that can prevent drivers from receiving a loan .

TikTok/tjthecarplug

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TikToker TJ Mitchell — who calls himself “your favorite car salesman” — took to the social media platform to reveal why those with a great credit score can still be denied a car loan from the bank .

He shared that his customer with a score of 700 was denied by the bank in a video that has garnered over 22,000 views.

“There are instances where not only bad credit, but good credit gets denied too,” Mitchell said.

He then shared that the customer’s issue involved DTI, which stands for debt -to-income ratio.

Mitchell explained that what the customer “had coming out — his debt — was way more than the money had had coming in, which was his income.”

He continued, “Therefore, the banks did not approve him for the car he was trying to pursue at the payment he was trying to pursue.”

Mitchell “suggested” that his customer choose a cheaper vehicle “that can fall in a good debt-to-income ratio where the banks would approve him.”

The TikToker continued, “So, just because you got a good credit score, the bank doesn’t always approve you.”

He then emphasized the importance of credit history, saying this “matters tremendously” and that “debt-to-income ratio is one of them.”

In the clip’s caption, Mitchell said that DTI “is another aspect of your credit history that banks take into consideration during the approval process.”

TIKTOK THOUGHTS

Other TikTok users took to the comments section to share their thoughts on Mitchell’s video.

“Like I always say it’s a big difference between making good money and having good money,” one wrote.

“They also looked at the variety of credit you have,” another informed.

A third user said that this credit rule also applies when purchasing a home .

What's a good credit score?

FICO, the most widely known credit scoring system, and its rival VantageScore both use a range of 300-850 points.

Below we list what’s considered a good and bad credit score, according to both systems.

FICO

• Poor: 300-579
• Fair: 580-669
• Good: 670-739
• Very good: 740-799
• Exceptional: 800 or above

VantageScore

• Very poor: 300-499
• Poor: 500-600
• Fair: 601-660
• Good: 661-780
• Excellent: 781-850

“So true and especially when you are buying a house!” they said.

“I see it every day,” another user wrote.

A fourth said they were in the same situation when they tried to get a bank loan for a car.

“Happened to me for this exact reason,” they shared.

A fifth commented, “I’ve never gotten denied for a car loan, think my DTI was high at one point.

“However, because of all R1, never late, paid off a couple of cars, etc. never asked for income.

“Every situation [is] different.”

Mitchell responded, “True every situation is.”

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