USDA Loan - Score Used? Improving it?

[BlueHusky]

Hello everyone,

My mom filed bankruptcy about 5 years ago when she lost her job, and has since managed to re-enter the work force. She has no credit cards or open accounts except for her auto loan (which is only about 4 months old) and her student loans. She is trying to get the USDA loan, which she qualifies for based on location and income. She called one bank who said she needed a 630 and had a 609, and that if she could just improve it a few more points she could qualify for a 33 year loan at 3% interest with no down payment with a max loan amount of $160,000. He said they used "Credit Plus" for the score.

So a few things:

1. What is "Credit Plus" and how can she improve it? Do all USDA rural loan lendors use this score?

2. How can we bring her score up? I suggested adding her as an AU to one of my credit cards (it's been open for 5 years, never late, 0% utilization) and thought maybe that would help?

Thanks in advance!!

[Scope27]

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@BlueHusky wrote:

Hello everyone,

My mom filed bankruptcy about 5 years ago when she lost her job, and has since managed to re-enter the work force. She has no credit cards or open accounts except for her auto loan (which is only about 4 months old) and her student loans. She is trying to get the USDA loan, which she qualifies for based on location and income. She called one bank who said she needed a 630 and had a 609, and that if she could just improve it a few more points she could qualify for a 33 year loan at 3% interest with no down payment with a max loan amount of $160,000. He said they used "Credit Plus" for the score.

So a few things:

1. What is "Credit Plus" and how can she improve it? Do all USDA rural loan lendors use this score?  My Rural lender used the FICO score so it's lender specific.  I've never heard of this score but there are hundreds of score models for lenders to choose.  Has she pulled her reports from here to see how it may compare with the FICO score.  That way she may be able to use the FICO score as an idea at how she will compare to the credit plus score.  She may also ask the lender to provide the company name that provides the score so you may be able to obtain the reports directly (long shot but worth a try).

2. How can we bring her score up? I suggested adding her as an AU to one of my credit cards (it's been open for 5 years, never late, 0% utilization) and thought maybe that would help?  Due to the loan application being manually reviewed AU accounts will not help her out.  I suggest she try and get a couple of secured credit cards and maintain a few months of good history with them.  I had scores in the 580's and got two secured cards and maintained them for 5 months and saw an increase to 662 TU and a 648 EQ FICO.  Every situation is different but with her not having any open credit it is actually hurting her because she isn't building a better foundation.  As I've learned through here credit scores likes a good debt history and with nothing to base credit algorithams on except negative history then the scores will never increase.  She needs to begin rebuilding with a couple rebuilders to establish a good foundation.

Thanks in advance!!

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