Credit Analyst how-to

How to Calculate Debt Service Coverage

DSCR shows ability to repay.

Updated By the Career Education Institute Curriculum Team
Quick answer

DSCR shows ability to repay. In short: get; add; find, then complete the remaining steps below.

Step by step

  1. Get net operating income.

  2. Add back non-cash expenses.

  3. Find annual debt payments.

  4. Divide income by payments.

  5. Compare to policy.

  6. Explain the result.

Safety reminders for credit analysts

  • Protect borrower information
  • Follow fair lending laws
  • Avoid conflicts of interest
  • Report suspected fraud

Spreading · DSCR · Leverage · Liquidity · Collateral · LTV: see the full credit analyst glossary.

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