Adria Was One Credit Score Away From Losing Her USDA Loan Near Hardeeville
Adria was one credit score away from losing her shot at a house outside Hardeeville, SC. The loan officer she first talked to never checked which of her three credit scores actually counted toward her USDA loan application. He looked at her lowest score, saw a number that worried him, and told her she might not qualify.
That almost cost her the house.
A Situation That Comes Up Often
This kind of mix-up happens more than you'd think. A situation that comes up often with USDA borrowers is having multiple credit scores pulled from different bureaus on the tri-merge credit report, or TMCR, and nobody on the lending side stopping to ask which score actually governs the file. It feels like a small detail. It is not.
What USDA Actually Says
USDA's own guidance, HB-1-3555, is specific about this. The handbook states: "Applicants with more than one credit score of 640 or higher on their TMCR, with no significant delinquency, are automatically classified as having acceptable credit histories. Exhibit 4-4 indicators of unacceptable credit need not be evaluated." It goes on to explain how the scoring works mechanically: if three scores are listed, the middle score is used. If two scores, the lower one is used. If only one score, a full credit analysis is required.
That means a borrower with three scores is not judged by the lowest number on the report. The middle score is what matters.
How This Played Out for Adria
Adria had three scores on her tri-merge report. Her lowest score was the one that worried the first loan officer. But her middle score was 640, which meant she had more than one score at or above that threshold with no significant delinquency. Under the guideline, that qualifies a borrower for streamlined processing. Exhibit 4-4 indicators did not need separate evaluation, and rent verification along with Form RD 1944-61 could be waived.
Instead of a drawn-out credit review, her file moved forward on the strength of the correct score, the one the guideline actually calls for.
What You Can Do Today
If you're pursuing a USDA loan and you have more than one credit score on your report, ask your loan officer this exact question: how many credit scores do I have on my TMCR, and which one is being used under Paragraph 4.12.A? Then ask for written confirmation of whether rent verification and Form RD 1944-61 are waived in your case.
That one question can tell you in minutes whether your file is being evaluated correctly, before you get an answer that was never based on the right number.
Let's Find Your Path
I'm Jason Sharon with Home Loans Inc. If you're working toward a USDA loan and your credit scores feel like a moving target, call me and let's look at your tri-merge report together.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.
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