What’s the minimum credit score for a VA home loan approval?
The VA does not have a minimum credit score for a VA Home Loan. However, most lenders do have minimum credit score requirements and that can vary.
Although a lender could technically approve a borrower with a credit score of 500 by manually underwriting it, I don’t see that happening. Someone with a 500 score would have some combination of currently delinquent obligations, collection accounts and possibly liens and judgments. This would indicate to a lender that the borrower doesn’t have adequate control of their finances.
Most veterans could get a VA Loan Approval with a FICO score of 580 or above along with additional compensating factors. Getting an approval with a 580 score is very realistic, although the interest rate/fee’s will be higher than for someone with a higher credit score.
If you have a limited credit history and NO CREDIT SCORE, it is possible to get a VA Loan Approval with “non-traditional” credit. This means providing evidence that you meet financial obligations in the form of rent, utility bills, insurance payments, etc…
If your scores are close, the good news is that low credit scores are fixable. It may take some time and effort. If there are credit cards that are close to the credit limit or over the limit, reducing the balances will improve the scores significantly. If there are collection accounts and judgments, it is possible to negotiate those items being paid at closing (maybe by the seller).
Finding a loan officer who’s willing to help you through the process of getting qualified (especially if you have issues on your credit report) is worth doing early in the game. It is possible to project credit scores and help you make the right decisions with improving your credit. It is ALWAYS possible to improve a credit score, but it takes a plan and the determination to follow through and execute it.
Hopefully this helps. Leave your information below to request more information on VA Home Loans from a Local Home Loan Expert!