Quick Answer
Yes, you can get a DSCR loan with bad credit as low as 620. Some lenders accept 600-619 with compensating factors. Lower credit scores require larger down payments (25-30%) and result in higher rates (7.5-9.5%).Key advantage: No income verification means credit issues from tax write-offs or business expenses don't matter.
Can I Get a DSCR Loan with Bad Credit?
DSCR Loan Credit Requirements
| Credit Score | Approval Status | Down Payment | Est. Rate |
|---|---|---|---|
| 700+ | ✓ Excellent | 20-25% | 5.99-7.0% |
| 680-699 | ✓ Very Good | 25% | 6.75-7.5% |
| 660-679 | ✓ Good | 25% | 7.25-8.0% |
| 640-659 | ✓ Fair | 25-30% | 7.75-8.5% |
| 620-639 | ✓ Approved | 30% | 8.25-9.5% |
| 600-619 | ⚠ Case-by-Case | 35%+ | 9.0-10.5% |
| Below 600 | ✗ Difficult | 40%+ | Special Pricing |
How to Qualify with Bad Credit
Larger Down Payment (30%+)
Strong compensating factor that offsets credit risk
Higher DSCR (1.25+)
Property with strong cash flow improves approval odds
Lower LTV (70% or less)
More equity reduces lender risk significantly
Explanation Letter
Explain credit issues (medical, divorce, business loss)
Strong Rental Market
Property in high-demand area with stable rents
Recent Payment History
12+ months of on-time payments shows improvement
Why DSCR Loans Work for Bad Credit
✓ DSCR Loan Advantages
- ✓ 620 minimum (vs 640-680 conventional)
- ✓ No income verification needed
- ✓ Credit issues from tax strategy OK
- ✓ Recent bankruptcy/foreclosure OK (2+ years)
- ✓ Self-employed with write-offs welcome
- ✓ Multiple late payments may be OK
✗ Conventional Challenges
- ✗ 640-680 minimum usually required
- ✗ Full income documentation
- ✗ Tax write-offs hurt qualification
- ✗ 3-7 years after bankruptcy
- ✗ DTI limits exclude many
- ✗ Strict credit event timelines
Real Example: 640 Credit Approval
Borrower: Self-employed, 640 credit, recent late payments
Property: $400K single-family, $3,200/month rent
Down Payment: 30% ($120K)
DSCR: 1.35
✓ APPROVED
Rate: 7.75%
Monthly Payment: $2,370 (PITI + HOA)
Cash Flow: +$830/month
Why it worked: 30% down, strong DSCR, and stable rental market compensated for 640 credit.
Improve Your Approval Odds
Short-Term (0-30 days)
- • Pay down credit card balances below 30% utilization
- • Dispute any errors on credit reports
- • Don't apply for new credit before loan
Medium-Term (3-6 months)
- • Make all payments on time
- • Pay down small collections (under $1K)
- • Increase down payment savings
Long-Term (6-12 months)
- • Establish 12+ months perfect payment history
- • Work with credit repair if needed
- • Target 680+ for much better rates
Get Pre-Approved with Bad Credit
We specialize in bad credit DSCR loans. Get a real approval decision in 24-48 hours.