While 580 is the minimum credit score required by most USDA-approved lenders (Some Lenders Allow 550), there’s a lot more to qualifying than just your score. Let’s break down why you may still be turned down — and what you can do about it.
Here are the most common reasons borrowers with a 580 score don’t qualify:
Even one 30-day late in the last 12 months, especially on rent or car payments, can hurt your chances. Multiple lates or a pattern of poor payment history? That’s a red flag.
Active, unpaid collections or charge-offs — especially recent or non-medical — can derail an application. Even if your score is 580+, lenders want to see financial responsibility.
You may have a 580 score but only one or two active tradelines, or no history of managing installment loans like auto or student loans. Lenders prefer at least 2–3 accounts with a 12-month payment history.
If your monthly debts are too high compared to your income, automated approval (GUS) won’t go through — and you may need manual underwriting, which has stricter rules.
Even with the right score, lenders want consistent employment over the last 2 years. Recent gaps, frequent job changes, or unverifiable income can hurt your chances.
If you’re close to qualifying, here’s how to get over the finish line:
Catch up and stay current on all debts – especially housing-related.
Pay off or settle small collections – even $100 accounts can be deal breakers.
Establish new tradelines – secured credit cards or credit builder loans help.
Lower your DTI – pay down credit cards and avoid financing anything new.
Document everything – stable job history, consistent income, and proof of reserves can strengthen your case.
While 580 is the technical minimum, getting your score to 620 or higher significantly increases your odds of approval — and allows for automated underwriting, which is more forgiving than manual review.
Just because you meet the credit score minimum doesn’t mean you meet all the guidelines. But don’t give up — knowing where you stand is the first step to getting approved.
Want a free USDA pre-qualification review? I’ll help you identify what’s holding you back and put together a plan to get you into a home — whether it takes 30 days or 6 months.
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Mark Crunk | NMLS #2267612 | Barrett Financial Group, L.L.C. | NMLS #181106 | 275 E Rivulon Blvd, Suite 200, Gilbert, AZ
85297 | AK AK181106 | CO | MO | NC B-203722 | Equal Housing Opportunity | This is not a commitment to lend. All loans are
subject to credit approval. | nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/181106