Below are USDA guidelines re: validating credit score as well as information on obtaining non-traditional credit.

Validating the Credit Score. Two or more eligible tradelines are necessary to validate an applicant’s credit report score. Eligible tradelines consist of credit accounts (revolving, installment etc.) with at least 12 months of repayment history reported on the credit report. At least one applicant whose income or assets are used for qualification must have a valid credit report score.

HB-1-3555 (03-09-16) SPECIAL PN 10-7 Confirm the applicant has at least two eligible tradelines reported to the credit bureau.

10.6 OBTAINING NON-TRADITIONAL CREDIT HISTORY Some applicants may not have an established credit history, but credit verified through alternative sources may indicate a willingness to pay recurring debts. Neither the lack of a credit history on a traditional credit report nor the applicant’s decision to not use traditional credit can be used as a basis for rejection. For this type of applicant, the lender will utilize alternative credit verification to establish the applicant’s willingness to repay the requested loan. The alternative credit tradeline may be open, closed and/or paid in full by the applicant. It must have at least 12 months of repayment history reported to be a valid alternative source to support validation of a credit score

Acceptable forms of documentation for a NTMCR include:
 Cancelled checks;
 Third-party verifications; or
 Non-traditional credit report for the following non-traditional credit sources that include the creditor’s name, date the account was opened, account balance, monthly payment due, and payment history reported in 0x30, 0x60, 0x90 format. Subjective statements such as “satisfactory” or “acceptable” are not an acceptable format for repayment history confirmation. Rural Development will accept reports by providers who develop bill payment histories.

Acceptable non-traditional tradeline sources include recent 12-month payment record of the following:
 Rent payments;
 Utility payment records (if utilities were not included in any rent payments) such as gas, electricity, water, land-line home telephone service or cable TV;
 Insurance payments (excluding those premiums paid through payroll deductions, for example - employee group health plans) such as medical (other than those provided as an employee benefit through salary), automobile, life and household, or renter’s insurance.

Insurance premiums paid other than monthly, such as quarterly or annually, will require documentation that meet a full 12 months history of payment;
 Payments to child care providers – made to a business providing such a service;
 School tuition;
 Payments to local stores (department, furniture, appliance and specialty stores);
 Payments for the uninsured portions of any medical bills;
 Internet/cell phone services;
 Automobile leases;
 A personal loan from an individual (other than a family member) with repayment terms in writing and supported by cancelled checks or money order receipts to document repayment;
 A documented 12-month history of saving by regular deposits (at least quarterly/non-payroll deducted/no NSF checks reflected), resulting in a reserve account equal to three months of proposed mortgage payments (PITI) as a cash reserve post-closing; or
 Any other reference which gives insight into the applicant’s willingness to make periodic payments on a regular basis for credit obligations. Payments made to relatives for credit sources are ineligible as a non-traditional trade reference. For this section a recent account is defined as an account which was closed no more than six months from the guaranteed loan application with the lender.

Original Question: 
Borrower has a 631 due to the fact that he only has one trade line reporting for 16 months. Can we accept alt credit, and if so how many does he need? He has rent and car insurance history. Do we need 12 months cancelled checks on the rent? Landlord is an individual and is the seller in this transaction. Thank you.