Published on: November 26th, 2021 | Written by Jimmy Vercellino
va home loans credit score

Purchasing a home is one of the most significant purchases you will ever make in regards to your finances. Your and your spouse will consider tons of smaller decisions leading to that monumental choice, like whether your family is happy in your current home or if you need extra space. However, your credit score is an underlying factor when it comes to applying for home loan options, stopping you from landing your dream home.

Fortunately, the Department of Veteran Affairs offers VA Loans to you and other qualifying veterans and active-duty military that ease credit score requirements. This government agency backs your home loan, which allows lenders and private banks to offer a more reasonable minimum credit score when buying a home. Depending on who you work with, they can be flexible with your VA Loan by offering alternatives to still get your family the financial lending you need.

Before finding and falling in love with your dream home, it is wise to know your credit score, what factors may affect your credit report, and what minimum requirements you must meet to make the dream home yours.

Who determines the credit score requirements?

Although the VA developed and supports the VA Home Loan program, this entity does not offer the loan and cannot set your loan’s requirements. The mortgage company, bank, or lender your family partners with will establish your credit score requirement. This standard will determine whether you are eligible to receive a VA Loan from them or not.

Each private home loan party is different and establishes their own minimum credit score policies. So if you do not meet the financial requirements with one institution, you can choose a different VA Loan Specialist who is more flexible and willing to work with you. We believe the best VA Home Lenders look at your unique financial situation as a whole rather than solely judge your repayment ability from a single number.

What is the minimum credit score requirement for a VA Loan?

Lenders who offer VA home loans do not strictly set a minimum credit score requirement in many cases, unlike those that offer conventional and FHA loans. They will honor your military service and consider other factors, such as your employment history, current income, down payment amount, and other debt levels. You can trust lenders that specialize in working with veterans to provide a VA Loan that has your family’s best future in mind.

In general, we recommend you have a score of at least 620 when applying for a VA Loan amount with a higher acceptance rate and lower mortgage rate. But there may be some mortgage lenders that will go as low as 580 for your dream home. Again, these numbers are suggestions and you can still be eligible for a VA Home loan if your credit is beneath the average.

How do credit scores affect my home loan?

Your already know that debt determines your credit score since banks and private parties will assess numerous factors, like your payment history. This figure assists home lenders by telling them how likely you are to default on the VA Loan, protecting them before they promise financial support. It will inform the home loan terms they establish for your family and could make or break your deal if they are picky.

For example, if you have a high score, this means that your history of repaying loans is high and you are less of a risk. A home lender will offer a better interest in this scenario because they can trust your financial management and your ability to repay.

However, they will ask for a higher VA Loan interest rate if your credit score is low since they either see poor or no money-handling history. Credit scores can affect the outcome of your home, but they equally affect the trust your lender will have in you.

Can I still get a loan with a bad credit score?

The short answer is yes. You and other servicemen and women can still receive a VA Home Loan with a score that some financial institutions consider below usual standards. Again, private lenders and other VA parties can be flexible with credit score requirements as long as they can see other reasons from your financial history that they can trust you. The ones you should work with will consider things, such as if you have a low debt-to-income ratio, and not weigh your credit history as heavily against you.

If your score is just too low for any credit lender to accept, there are steps you can take to improve your credit score. We suggest paying off loans, cancelling credit cards, or making steady payments for a couple of months. Just because you do not qualify today does not mean you cannot qualify in the near future with some focus and dedication.

We Can Assist with Your Current Credit Score

If you know that your debt is in line and your credit score is high, you may be ready to begin your home buying journey. Or perhaps you know your score is low and need some assistance deciding what steps to take to improve your credit score as fast as possible.

Our team’s mission is to provide and assist you and other veterans and service members wiith all your VA Home Loan financing needs. We take personal attention to all aspects of your financial history before making a loan offer and walk you through the process from start to finish. To speak with our veteran-run team and start your VA Loan Journey today through purchasing your first home, applying for a VA cash-out refinance, or anything in between, give us a call at (602).908.5849.



VA loan specialist Jimmy Vercellino
Jimmy Vercellino

Mortgage Originator, Specializing in VA Loans

Jimmy Vercellino, a Marine veteran, specializes in helping military veterans benefit from the VA Loan Program and buy the home of their dreams.