How To Get A USDA Loan If You Don’t Have Any Credit
Can you get a Zero Down USDA Loan if you don’t have credit?
Now that is another really good question.
People looking to buy a home with a USDA Loan who do not have traditional credit histories can still qualify.
Since credit history is such a large part of getting any type of loan approved, what we need to do in a case where someone does not have a credit history is to… build a credit history.
The USDA Loan does specifically state that a non traditional credit report cannot be used to enhance bad credit or a poor payment history.
But before we build a credit history it is important that you know this works only for a person who has absolutely no credit. It will not work for someone who has old bad credit. The credit history slate needs to be completely blank.
A good place to go to see what your credit looks like is annual credit report dot com.
Okay, so here is how we build a credit history…
We’ll need to find alternative types of credit history that are at least 12 months old. Here is a list of references that we’ve had some really great results with..
- Rent payments as long as they can be verified and documented. Cancelled rent checks do the trick well.
- Utility bill payments such as: gas, electric, water, sewer, telephone, cable tv, etc.
- Insurance payments such as: medical, health, life, auto or renters insurance
- School tuition is a great resource
- Department stores
- Anything that is a regular payment that can be documented for 12 continuous months
Apply for a USDA Loan Online Now: Loan Application
If you do can verify your current rent payments, you will only need to have 3 of these ALTERNATIVE credit histories. If your rent history cannot be verified.. say you pay rent in cash or live with family rent free or pay rent with a cashier’s check, you would need to have 4 of these alternative credit histories. Then you can use them to qualify for a USDA rural home loan.
Since a borrower without a credit history is a higher risk, you’ll also need to be able to verify that you have a payment cushion in the bank. So you’ll need to show at least 2 months of payments in a bank account.
I hope you found this Arizona Home Loan tip useful and would love to hear your comments.
To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Get Started on USDA tab above and ask for a quote. If you want to go ahead and get your application in, you can fill out my Home Loan Application Online here.
- 3 Things The Lender Looks At When You Apply For A USDA Rural Development Home Loan
- Simple Tips To Optimize Your Credit Score For The USDA Loan
- How To Get A Zero Down USDA Loan Even If Your Spouse Has Bad Credit
- What Credit Score Does The USDA Loan Require?
- USDA Loan Guidelines – Applicant eligibility requirements