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Will your USDA loan be denied because of authorized user accounts?

July 29th, 2016 by Sean Stephens

Will your USDA loan be denied because of authorized user accounts?

Do you know what an authorized user account is and how it can affect the USDA loan approval process?

Now, this may seem trivial to some, at least until a loan closing is cancelled because of this issue.

In today’s video tip, we will explain what an authorized user account is, and how it can affect USDA loan eligibility.

Before we get started, don’t forget to download our USDA blueprint for success with the link below. This free guide is designed to break down the process step by step and is a great educational resource for the Real Estate Community.

USDA Credit Qualifying Questions Answered – Authorized User Accounts

According to Investopedia, a Credit Card Authorized User is defined as “A person who has permission to use and/or carry another person’s credit card, but isn’t legally responsible for paying the bill.” This could be anyone from a dependent on a parent’s account,  possibly a spouse or a fiance, or possibly no relationship at all.

This may sound harmless, but you may be asking yourself  how could a USDA loan be denied because of authorized user accounts? As you have probably guessed by now, USDA loan qualifying has specific guidelines regarding authorized user accounts.



It is a critical aspect of any USDA loan approval for the underwriter to have a complete understanding of the credit file in order to determine the borrower’s overall credit reputation.

No further action is needed if certain requirements are met, such as:

  • The owner of the authorized user account is the applicant’s spouse, or
  • Another borrower on the application is the owner of the account, or
  • The applicant has made payments on the account for the previous 12 months prior to application, or
  • There are two or more other tradelines listed on the credit report, which are not authorized user accounts, with at least 12 months of payment history listed to validate the credit score.

However, in the event that none of these requirements can be met, the loan can still be approved, but under more stringent USDA Manual Underwriting GuidelinesFlorida USDA Approved Lender.

I realize USDA qualifying guidelines can be complicated, but that is where we step in to help.

My team is built to help walk homebuyers through the USDA process step by step.

Just simply call or email to discuss your scenario, schedule a convenient call back time, or complete our 1-2-3 online pre-qualifier to get started.

As an approved USDA lender, we offer specific experience and expertise on this unique program. Through this, we are able to provide value to the rural communities we serve and for those who need the benefits of a USDA loan.

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