Most lenders will also check your debt-to-income ratio, which is a percentage that shows how much of your monthly income goes towards paying off debts such as your credit card and mortgage.
Instead of acting as a financial CV, as your credit score does, your ratio compares your essential outgoings to your income to help lenders to assess your ability to manage monthly repayments. You can also use it yourself to check whether you’re in good enough financial shape to take on a new loan.
Lenders will expect your monthly repayments to be covered by a certain percentage of your income. If your debts are less than this portion of your income, you may be allowed the loan. Aim for a debt-to-income ratio of less than 45%, especially if you’re applying for a mortgage, but the lower the better.