What Credit Score Does The USDA Loan Require?
The USDA Loan and Credit Scores..
People ask me all the time what credit score is needed to get a USDA loan to buy a house in Arizona with absolutely Zero Down Payment. There are actually a pretty good variety of answers to this question.
Before we open the curtain on the USDA Loan and show you the credit score options, let’s take a look at what a credit score is.
There are three credit bureaus and each has a detailed history of an individual’s credit. They are Trans Union, Equifax and Experian. They each have their own super secret, mathematical model that they use to create and formulate a person’s credit score. It’s basically like your credit history goes into the big credit machine, and out comes a three digit number.
That number is a score that lenders will use to determine your level of risk. So a lower score means a higher risk and a higher score means a lower risk.
So, you’ll have a score from Trans Union, from Experian and from Equifax. The score used to qualify for a loan is the middle of the three scores. So let’s say you have a 648 from Trans Union, a 602 from Experian and a 623 from Equifax then you middle score would be the 623.
Now, the USDA Loan does not have an actual minimum credit score, can you believe that? But the lenders who fund the USDA loans will generally require a minimum middle credit score of 620 and the USDA does advise that lenders should not approve loans with less than a 580 middle credit score. Some lenders will go with a lower score, say down to 580 or so, but be prepared to pay significantly more in closing costs with such a low score.
Apply for a USDA Loan Online Now: Loan Application
NOTE: Our company requires a middle credit score of at least 620 to fund a USDA Loan.
If your credit score is standing in your way from qualifying for a USDA rural home loan, then be sure and get a free copy from annualcreditreport dot com and verify that the information is all correct. I wrote a post last week on some tips you can use to improve your credit score also.
So in summary, as a general rule if you have a middle credit score of 620 then you will have a very good chance of getting approved for a USDA rural home loan.
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 Arizona Home Loan Application Online here.
- USDA Rural Home Loans – Credit Score Requirements
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- Simple Tips To Optimize Your Credit Score For The USDA Loan
- Fannie Mae Just Helped Make The USDA Loan Program Cheaper And Easier
- How To Get A USDA Loan If You Don’t Have Any Credit