Credit Score Requirements

VA Credit Score Requirements

In addition to your ability to pay for a mortgage VA will look at your ability to repay as indicated by your credit report. Your willingness will be judged by your credit report records — that is, how well you’ve paid your loans and other debts in the past. If you are unsure what your credit report is like, you may want to begin by getting a lenders credit report that you can view immediately.

To help you understand why credit is important and why VA will look at your credit, please try to understand the following: Perfect credit is what you are supposed to have. Whenever you borrower money (credit cards, auto loans, student loans, etc.) you are making a commitment to that creditor to pay them back on the terms mutually agreed upon. If you are late making the payment then you broke the commitment and the lender can indicate this on your credit report.

The lender does not know why you are late, they just know that you broke the commitment agreed upon. They are not responsible on helping you manage your bills and debt, as they simply make and offer and the borrower accepts the terms.  This is why your credit is very important in qualifying for a home loan. Although you are supposed to have perfect credit,  VA will allow for minor past credit issues, as long as there is a “reasonable” reason why there was an issue.  VA will look mostly at the last two years of your credit history. If there are some credit issues, we may be able to overcome them with sufficient explanations and supporting documents of why the issues occurred.

Following are some of the reasons VA will accept:

• Lost of Job
• Job Transfer
• Serious Illness

As long as it seems to make sense, and it is not just because you did not make the payment or because you had too much other debt. You should not rule yourself out of qualifying for VA loan to buy a home because of credit issues until you allowed a mortgage consultant to review your credit.

There are some credit issues that you must allow for a certain time (seasoning) to past before you can qualify for a VA loan. They are follows:

• Two years from the date of discharge for a  Bankruptcy
• Three years from the date of Foreclosure

Also VA would typically require that any outstanding collection accounts, judgments, charge off’s be paid off in full before closing your loan but not necessarily before “approving” your loan.





If you have a “Federal Tax Lien” that is in a repayment agreement, you do not have to pay it off in full but you must be able to qualify with the monthly payment of the repayment agreement.  “State Tax Liens” typically must be paid in full prior to closing your VA loan.

Another advantage of VA loans is that VA does not require a credit scoring item called a FICO (Fair Issac Company) score. So if you have no credit at all you may still qualify for a VA loan. If you have some credit you will typically need a minimum middle credit score of 620 to qualify for a VA loan.





When you apply to get pre-approved for a VA home loan, we will order a credit report for you. The credit report will show your record of payments on loans, charge cards and other similar debts. If you have never had a loan or a charge card, you can show that you have a good record of payment on your utility bills and rent payments.

We will review your credit report with you. Should you have some credit issues that prohibit you from qualifying for a VA loan now, we will show you how to correct the issues so that you we can help you qualify to purchase in the future.  In today’s world Lenders are looking for a credit score of a 620 or better in order to qualify for an VA Mortgage. But the truth is you can have a credit score lower than this with compensating factors.

For Credit Scores below 620 please contact your mortgage consultant for future information.

More information:

• What is a VA Loan?