USDA- CR QUESTION

[Dani62384]

I applied for the USDA Rural Development loan last year. I got denied due to my negative accounts on my CR. Fine...so they listed the accounts I needed to take care of before re-applying. All 5 medical bills- 4 from same place, 1 other. Not a problem. I paid those and got them deleted from my report. But the more I thought about it the more I began to wonder. Those 5 things were only listed on 1 out of 3 of my CR's. And on that report, I had about 4 other collections listed. Why didn't they list those? I am so curious about this question. I just want to ask them. But since I applied, I have changed jobs and more than doubled my yearly salary, opened 2 new lines of credit, and PFD the 5 accounts they listed. I am so ready to reappy again, but I am afraid of the other things on my credit report, which I am trying to wait-out since they are all falling off this year. Any ideas why those collections wouldn't have been listed?

[Anonymous]

I am DEFINITELY not an expert but I can tell you what I have learned from my mortgage broker.  I am in the process of buying a home via USDA Rurual Guaranteed.  We have three unpaid charged off accounts from 2008.  We have been pre-approved, placed and offer, seller accepted but now waiting on bank approval (short sale).  

My realtor explained that it all depends on what the lender is willing to accept.  He stated as long as there are no new late accounts within the last 12 months (also required by USDA) and the amount owed is under 5,000 they will not require for you to pay the C/O.  With that being said you have to have a decent score and any other compensating factors really help.  For us we have 5 accounts in good standing, $20,000+ vest in 401K, a little bit of $ in the bank, long standing job history.  

So maybe the answer to your question is that those medical accounts were last paid or occured within the year that you applied???  I am sure someone will be able to help you but the above is just knowledge via my current situation.  

[boomhower]

If I had to guess I'd say they were more recent than the others or the amount in question was higher, still leaning towards age.  Was that the difference?

[Anonymous]

The difference is that USDA will requires you not to have any late payments within the last twelve months.  However, if you have a C/O that is unpaid you can still qualify as long as it has been charged off for atleast 2 years and you have not made any payments within those two years.  I know it sounds crazy but to pay on a C/O can really mess things up unless you are paying it off completely.  The other thing he advised me is that if the charge off was over 5,000 you would have to pay it off or at least pay it down to 5,000.00.

[Deepauk]

Hi - Please help me in answering my query which is quite related to you previous posting..

I had a foreclosure and 1st mortgage took off all the money and the 2nd mortgage did not get any peeny so they charged off ( all  this happened in april 2009 ). 

2nd mortgage charge off ( amt was 89,000/-) Waiting till May so that my SOL of 3 years in VA will surpass so that they cannot sue me..

Planning to apply for USDA and credit score is TU is 730 and Equifax is 703 . Balance in credit card is 15,000.. There is no lates for past 12 months.

Do you think they will qualify me for an USDA loan .. 

Please advise.

[Dani62384]

Well the other things listed are older, and are all supposed to fall off this year. But those medical bills were from 2007, which is a little more recent, but still 5 years old, and they only totalled $1000. Which is fine, I paid...but it just really makes me wonder about the other things, and if I apply again, will those ones factor into the decision this time???? Just one of those things that makes you say, huh?

[CreditCrusader]

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@Dani62384 wrote:

I applied for the USDA Rural Development loan last year. I got denied due to my negative accounts on my CR. Fine...so they listed the accounts I needed to take care of before re-applying. All 5 medical bills- 4 from same place, 1 other. Not a problem. I paid those and got them deleted from my report. But the more I thought about it the more I began to wonder. Those 5 things were only listed on 1 out of 3 of my CR's. And on that report, I had about 4 other collections listed. Why didn't they list those? I am so curious about this question. I just want to ask them. But since I applied, I have changed jobs and more than doubled my yearly salary, opened 2 new lines of credit, and PFD the 5 accounts they listed. I am so ready to reappy again, but I am afraid of the other things on my credit report, which I am trying to wait-out since they are all falling off this year. Any ideas why those collections wouldn't have been listed?

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I'm pretty sure your median FICO bureau score also needs to be a minimum of 620.