What's the Minimum Credit Score for VA Mortgage Loans?

While the VA itself doesn’t have a minimum credit score requirement, most lenders do. A good credit score will most likely help you get a better VA mortgage loan. But even if your credit score is less than ideal, don’t worry – one of the benefits of a VA loan is that it has more relaxed credit score requirements. Here we’ll discuss what you need to know about your credit score when looking into VA mortgage loans.

Do VA Mortgage Loans Have a Minimum Credit Score Requirement?

The Department of Veterans Affairs oversees the VA loan program and guarantees a portion of each loan. But the VA does not issue loans itself, and it doesn’t enforce any credit score minimum. However, most lenders do have credit score minimum requirements for approving a loan.

VA lenders generally use benchmarks that determine whether or not you’re eligible for a VA mortgage loan. The minimum credit score may vary from lender to lender.

What if My Credit Score Is Too Low to Qualify?

You don’t need to abandon your dream of homeownership due to a low credit score. Your credit is constantly changing, and if you make some changes to your financial habits, you can raise your score. You can try paying off your high-interest debt, canceling credit cards that lead you to overspend and continue to make payments on time. Eventually, you can increase your score enough to qualify for the loan you’re seeking.

Here are a couple of factors that may be affecting your credit score:

Late Mortgage Payments

Making late payments on your mortgage or any other debt will significantly hurt your credit score. However, if once you’ve made payments on time continuously for a year or more, your credit will usually be reestablished.

No Credit History

If you lack an established credit history, it may be hard for you to qualify for a loan. In this case, you’ll need to spend some time building a credit profile by incurring debts and making on-time payments for a while before you qualify for a VA loan. Some lenders might consider non-traditional credit lines if you don’t have much credit history, but that will vary depending on your circumstances and your lender.

Collections and Federal Debts

Lenders may not approve your loan if you have too much collection debt. If you have defaulted on a loan in the past or are delinquent on any federal debt, you may need to spend some time re-establishing your credit. Some lenders may not approve your VA loan until you’ve been cleared from the federal debt database known as CAIVRS.