VA Loan Credit Score Requirements

A common question out there among veterans and active military members seeking to buy a new home or refinance their home, is what are the “VA loan credit score requirements”.   The good news is that VA home loans are fairly lenient when it comes to minimum credit standards.  One big key is that to qualify for a VA loan most lenders do not want to see a late payment on a major account such as a mortgage in the last 12 months.  Below I will bullet point some other requirements of VA home loans:

  • You can generally qualify for a VA loan as long as you have a 600 credit score.  There are options though for as low as 500 in some cases
  • If you have had prior chapter 7 bankruptcy it is a two year wait after the discharge to qualify for a VA loan
  • If you had a prior chapter 13 bankruptcy you just have to have made 12 months of payments
  • If you had a prior short sale you can qualify for a VA loan in only 12 months after the short sale was sold
  • If you had a prior foreclosure it is a two year wait after the house that foreclosed sold
  • If you have collection accounts due to medical bills VA home loan credit requirements will generally overlook these
  • Small outstanding collections are generally OK, depending on how many

Below are some tips to help improve your credit score to obtain a VA home loan.  By the way, don’t hesitate to call us if you would like free counseling on how to improve your credit score.

  • Try to pay credit card balances down to 30% or less of your credit limit.  The credit scoring system penalizes you if balances are over 30%.
  • Make sure you review your credit report in detail and have any mistakes removed.  We can pull a very through mortgage credit report for you.
  • Make sure you have 3-4 active lines of credit.  If not, open a store card or credit card and charge small items you need anyway to it so they will start reporting on time payments to your credit.
  • Make sure you pay ANYTHING that reports to the credit bureaus first (credit cards, auto loans, mortgages, student loans).  Items like cell phone, insurance, utilities, cable TV do not report monthly payment history to you credit.