Valued Member
Posts: 56
Registered: ‎03-09-2013

USDA and Collections

Do you need to pay off Collections in order to qualify for USDA? i am looking at an August/Sept. Close. I am at 610 middle score and should be able to get that to 640 by then. I have 7 collections now ( 4 are Mediacl ). Do i need to get all 7 paid off ?

Regular Contributor
Posts: 208
Registered: ‎04-15-2009

Re: USDA and Collections

The USDA doesn't specify in their underwriting guidelines if unpaid collections must be paid.  What they do state is that if an individual has any derogatory credit items, explanations must be submitted to explain the items if your credit score is below a 620.  Most lenders will require a letter of explanation for derog items anyway.  As far as paying the colllections, that may or may not be an overlay requirement that your lender has above what the USDA says.  

Starting Score: EX 575/TU 534/EQ 570
Current Scores per Myfico: (As of 12-14-13) EX 690/EQ 685/TU 679
Goal Score: 720

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