va mortgage loan low credit score

VA Loans

Getting a VA Mortgage Loan with a Low Credit Score

Are you ready to settle down but worried that your low credit score will get in the way? Getting a VA mortgage loan with a low credit score can be challenging, but it’s far from impossible. The good news is that the VA doesn’t require a certain credit score; lenders do. And some lenders may be willing to make an exception if you can prove your financial worthiness. Here’s what you need to know.


What’s Considered a “Bad” Credit Score?

Generally speaking, any credit score below 669 is considered a “low” credit score. A credit score between 580 and 669 is considered “fair”, but a score of 579 or under is thought of as “poor” credit. Credit scores between 670 to 739 are “good”, and scores between 740 to 799 are “very good”. Anything above 800 is considered “excellent.”


Can You Get a VA Loan with a Low Credit Score?

Some lenders may still be willing to accept a low credit score for a VA loan applicant, so long as you’re able to prove that you’re financially worthy in other ways. Examples include making a large down payment or having a good debt-to-income ratio.


How to Increase Your Chances of Approval

Here are some steps you can take to increase your chances of getting approved for a VA mortgage loan:


  1. Put Money Down

VA loans may not require a down payment, but if you’re worried about a low credit score impacting your ability to qualify, you may want to consider putting money down anyway. Making a large down payment could send the message to your lender that you’re financially stable. 


  1. Improve Debt-to-Income Ratio

Another way that you could increase your odds of approval is by focusing on your debt-to-income ratio. VA guidelines suggest that a borrower’s debt-to-income ratio should be no more than 41%. Anything lower, of course, looks better on paper. To improve your DTI, you can either pay down your debt, try to increase your income, or attempt a combination of both. 


  1. Increase Your Credit Score

The best way to increase your chances of qualifying is to raise your credit score. You can do this in a lot of ways; paying down your balances, making payments on time, asking for an increase in credit limit, etc. 


Talk to an Expert

Don’t let low credit prevent you from qualifying for a VA mortgage loan. Call our office today to get expert advice and information on how to increase your chances of approval.