What is the Minimum Credit Score to Qualify for a USDA Loan?
What is the Minimum Credit Score for a USDA Loan?
This week’s video tip is valuable information for homebuyers with zero or thin credit scores wondering if they meet the minimum credit score requirement for a USDA loan or for a homebuyer who has fallen below this requirement.
Meeting Minimum Credit Score for a USDA Loan through Credit Rescoring
To qualify for a USDA loan an applicant must have a minimum credit score of 620 if working with manual underwriting. As many lenders only use automated underwriting, all applicants being processed through GUS (Guaranteed Underwriting System) require a minimum score of 640.
However, through credit rescoring it is possible to increase your credit score in as little as 3 to 5 business days to improve your score enough to meet the minimum credit score requirements for a USDA loan.
Credit Rescoring Steps:
- Review the customer’s credit to analyze what can be done to improve scores: This includes looking at a customer’s credit history, both manually and from an automated standpoint, to see if there are any balances the customer can pay down to increase their score.
- Customer will then pay down the previously discussed balances to the specified amount and provide documentation.
- Our credit company then works directly with the credit bureaus to update scores: Once the scores are updated we are able to then re-process the loan application.
- The process takes 3 to 5 business days to complete after the required documents are submitted
- There is NO additional charge to the customer for this process
Some helpful reminders about this free service:
- This is not credit repair
- We are not a credit repair company
- Results can vary based on the differences within each credit report
- This is beneficial for any customer looking to maximize their credit scores
- Credit rescoring works best with open credit card account balances
- Great tool for the pre-approval process