Can you get a VA loan with bad credit? The good news is that many veterans have qualified for VA home loans with bad credit. If you’re looking to take out a VA loan but have less than perfect credit, you might still qualify for a military home loan. At Low VA Rates, we do not normally have any minimum credit score requirements attached to our VA loans. Other VA lenders might require a 620-640 FICO score or higher. They often have overlays which simply means their own set of guidelines. Here at Low VA rates, we always try to go by the VA handbook, which means that we do not have overlays like other mortgage lenders. Your chances of getting approved here at Low VA Rates are much higher than a bank with overlays. So if you have ever asked the question “Can I get a VA home loan with bad credit?” the answer is there is a very good chance you can with Low VA Rates.
VA Home Loan Bad Credit: What Does the Handbook Say?
So whats the VA handbook say about VA home loans with bad credit? The VA handbook does not specify a minimum credit score. So that means if your credit is subpar, we may still be able to get you into a VA mortgage loan. We understand that your credit score isn’t everything. Sometimes low scores are the result of one incident that was out of your control. We want to help all veterans achieve homeownership, so we’ll take the time and effort to really know your unique situation before we make any quick decisions about approving or not approving you.
We do look at your credit score, but we balance it against a variety of other deciding factors, such as your payment history, your income, and other information on your credit report that indicates how you’ve handled debt in the past and how well you’re likely to manage it in the future. Make sure you’re up to date on all your payments, like bills or student loans. If you have bad credit but need to apply for a loan in the future, one good strategy is to keep up good payment habits for a solid year before applying for a VA loan. This will reflect well on your credit worthiness and let the lender know that you can improve, that your bad credit is just a temporary setback.
Improve Your Credit Score
While a low credit score doesn’t have to hold you back, it never hurts to be constantly improving your score any way you can. If your credit score is sub-prime, you may be approved for a loan but at a very high interest rate. On the flip side, higher credit scores mean lower rates, which usually mean lower payments. Depending on what caused your sub-prime credit score, getting it up can take some time. Above all, have patience and don’t give up. Here are some things you can do every day to improve your credit:
- Enroll in automatic bill pay. Delinquent payments are the number one killer of credit scores. The majority of online banking sites offer this service so that you never have to worry about forgetting to pay your bills on time and in full.
- Set up payment reminders. This is also something you can do with online banking, or you can set up your own reminders on your phone.
- Pay off debt fast! If you ever find you have extra money lying around, either from tax returns or reimbursements, put that money towards your loan. You don’t have to pay just the minimum amount every month.
- Limit your lines of credit. Opening too many lines of credit can hurt your score, so only apply for credit cards you absolutely need to establish your credit. Then, keep those card balances on the low side and always pay them off on time.
Loan officers at Low VA Rates are ready and able to help you improve your credit. Here at our Military Mortgage Center, numerous resources regarding improving and managing credit are at your disposal. We invite you to look through articles and watch in-depth videos, all of which contain helpful information for anyone looking to reconcile their credit score with a VA home loan. For any other questions, give us a call! Our number is 855-223-0705.