Now loading.
Please wait.


USDA Loan Experts: 866-661-0581

Credit Score Guidelines

Home Credit Score Guidelines
Home Credit Score Guidelines

What Credit Score Do I Need In Order To Qualify For A USDA Home Loan?

Every type of loan requires you to meet some basic credit requirements. However, a USDA home loan offers requirements that even people with past credit issues may be able to meet.

USDA home loans are supported by the federal government, and the government subsidizes nearly 100% of the losses that a lender must incur if the borrower defaults on the loan.

These government guarantees allow a wide spectrum of lenders to take action in the USDA loan program and provide loans with favorable terms to people of low and moderate income.

One of the most important qualifications in any federal loan program is the credit score. Though federal programs typically require lower scores than private loans, you still must meet some very basic requirements.

In the event you do not meet all of the requirements on your own, then you may still be able to get your loan if you have a qualified co-borrower who will be living with you on the property.

Important Points

No matter what the situation is, when you try to take out a loan you'll need to submit to a credit check. A credit check is one way of determining whether you will handle your loan responsibly.

Even if you don't have an excellent credit score, you can still qualify for a USDA home loan. However, you can't qualify if you have had certain credit issues within a short period of time.

What are the major issues that might disqualify you from getting a USDA loan?

  • You will usually be disqualified if you have a 30-day late payment within the last 12 months
  • You will usually be disqualified if you've had more than two late rent payments in 24 months
  • You will usually be disqualified for delinquent federal debt and for tax liens on your property

There is an exception: If you have delinquent federal debt that is covered by a current repayment plan, you may be able to qualify.

Depending on your situation, it can be difficult for you to estimate on your own whether you will be able to qualify for a USDA home loan. With the help of our national network of top experts on the USDA loan program, you can get straight answers easily.

Brief Summary

No matter what your credit score or situation may be, the best way to find out if you may qualify for a USDA loan is to talk to an expert. However, you can learn about some factors.

Your credit history will be reviewed before any USDA backed loan can be issued, no matter how much the loan is for. When the credit score is reviewed, you will have to meet certain criteria:

  • You must not have any obligations that are 30 days past due or more in the last 12 months
  • You must not have had either a foreclosure discharge or a bankruptcy within 36 months
  • You must not have more than two payments of rent 30 days late within the last 36 months
  • You must have no outstanding collections activity not covered by a repayment agreement
  • You must have no credit or other accounts remitted to collections agencies within 12 months

What are the different credit scores and what do they mean? Let's take a closer look:

Credit Score Equaling 640 Or More
Although there are no hard and fast cutoff points for your credit score under USDA rules, a score of 620 or more works in your favor by making the process much faster and easier. You will not have to submit certain kinds of documentation and will have greater consideration given if you have some minor credit issues that are unresolved.

Credit Score Between 580 And 639
Because of the higher risk of default, you will need to submit detailed rent and housing histories and take action on collections accounts and other current credit issues. You may need to submit a request for a special waiver to move forward with your loan.

Credit Score Below 581
There is a large risk of default for this category of borrower, so such a borrower might be barred from getting a loan if they have any outstanding credit issues. These include things like being 30 days late on any payment in the last 12 months

No Credit Score
If you do not have any credit score due to a lack of traditional credit, you will need to submit more documentation to be considered.



Is a perfect credit history required?


You do not need a perfect credit history to qualify. A credit score of 620 is considered ideal for the program, but you may qualify with a score below 581 if you can demonstrate good current financial habits and steady income.


Will a bankruptcy bar me from getting a loan?


You may not be able to get a loan if your bankruptcy is recent. However, you can qualify if you have been discharged from a Chapter 13 bankruptcy for 36 months or more or have made all court-ordered payments as required for a Chapter 7 bankruptcy for one year.


What requirements are associated with a USDA loan?


You must have a steady source of income, have low or moderate income relative to your area, and have an overall positive pattern of credit and financial behavior. A credit score of 620 or above is considered excellent for the program.

Monthly housing costs cannot exceed 29% of gross income, and total indebtedness may not exceed 41% of gross income. The borrower must be at least 18 years of age, a U.S. citizen or qualified alien, not be housed in an adequate home in the area and be unable to qualify for conventional loan funding. He or she must intend to reside permanently in the area.


What are the income limits?


Income must not exceed 115% of the local median income.


Can I use a co-signer?


You may use a co-signer if another person intends to reside permanently in the home with you. Someone with equal or greater income and credit score will bolster your application.

Speak With A USDA Lender Today And
Get Pre-Approved For A USDA Loan

Learn More About USDA Loans Get Started