Call to get Pre-Qualified: 800-806-9836 x280
Site Logo
USDA Vendor Logo

What are USDA qualifications for those with little or no credit history?

February 28th, 2020 by Sean Stephens

What are USDA qualifications for those with little or no credit history?

It is possible to qualify for a USDA loan with little or no credit history?

When a homebuyer does not have an established credit history, USDA qualifications allow the ability to utilize non-traditional credit accounts.

In today’s video, I’ll discuss qualifying options that are available for those with limited or no history reporting to any of the credit bureaus. This allows for increased qualifying flexibility… that’s a USDA staple!

You can learn all about USDA eligibility in our FREE download USDA Blueprint to Success. This educational download will show you the USDA process from qualifying to closing.

Traditional vs Non-Traditional Credit

Traditional credit refers to companies that typically report their accounts to credit bureaus like Experian, TransUnion, and Equifax. For USDA qualification these traditional credit reference may include:

  • Auto loan(s)
  • Credit card(s)

However, sources which do not report to credit bureaus are classified as non-traditional credit. These alternative credit sources may include:

  • Electric bill
  • Water bill
  • Phone bill
  • Rental payments through either a management company or canceled checks to a private landlord

USDA Qualifications

Tampa FL USDA Approved Lender List


Overall, USDA guidelines require that there are at least two eligible tradelines (accounts) on the credit report with at least 12 months of repayment history. This is to be reviewed as part of their minimum credit reputation requirement.

However, when a potential home buyer does not have traditional credit there are still non-traditional credit accounts that can be used for USDA eligibility. These alternative credit sources help establish their ability to qualify and repay the loan.


For those buyers who have limited or no credit history USDA qualifications require the following when using non-traditional credit to qualify:

  • Two trade references are required when at least one of the trade references includes verification of rental housing payments or mortgage loan payments.
  • If unavailable, at least three trade references must be used to determine if an applicant has a sufficient credit history.

Once we are able to determine which eligible recent accounts are to be verified, payment histories will be reviewed in order to determine their eligibility towards USDA qualifications.

Minimum Credit Conditions Will Apply

Sebring, Avon Park, Lake Placid, Highlands County USDA loansRemember, it is possible to meet USDA qualifications with little or no credit history. However, minimum credit conditions will apply and non-traditional credit may not be used to substitute for negative credit.

We understand that qualifying for a USDA Loan may seem difficult and overwhelming, but that is why my team and I are here to help! As an approved USDA lender, we can maximize the potential of this unique program and open the door to homeownership.

Keep us in mind for your next pre-qualification or if you have a current USDA loan in progress and need an expert 2nd opinion. Just call or email to discuss your scenario and let us show you the Metroplex difference!

Toll-Free: (800)806-9836 Ext. 280

Plus, don’t forget to download our FREE USDA Blueprint for Success. Go make it a great day and I look forward to seeing you for next’s week quick tip!

back to top