USDA Loan Credit Requirements Make It Easier to Buy a Home

Loan Credit Requirements – Minimum Credit Score

It will be important to know the difference between free credit scores vs mortgage credit scores. Checking credit report sites such as Credit Karma may give you a rough estimate as to what your score may be, but it will not likely be entirely accurate. You will want your mortgage lender pull your credit to truly determine what you will qualify for.

As we mentioned earlier, the USDA loan is very forgiving when it comes to credit scores. This program allows as low as a 620 mortgage credit score. That’s pretty aggressive for a no-money-down purchase!

Typically, a 620 credit score means using the middle of 3 credit scores pulled by the lender. Although it is possible through the USDA loan credit requirements to have only 2 scores, and loan approval may even be possible with only one score.

Buying a Home with One Credit Score

That’s right, a no-money-down purchase with one credit score is possible! Keep in mind that USDA loan credit requirements are not based solely on credit scores. Additionally, whether there are one, two, or three credit scores, there must be sufficient established credit. This is very important, especially for buyers with only one credit score.

Along with credit scores, lenders will need to determine creditworthiness, which is defined as the extent to which a person or company is considered suitable to receive financial credit. To determine creditworthiness, your lender will review items such as:

  • Repayment patterns
  • Credit utilization
  • Length of credit history