What Is the Minimum VA Loan Credit Score?
Rebecca, a freelance editor for LendingTree, is a marketing and content specialist who has worked in the personal finance space since 2017. A graduate of Millersville University of Pennsylvania, she received a degree in English with a minor in journalism. As a Taurus, Rebecca struggles with budgeting and tends to live by a “treat yourself” mindset. She’s working on it.
The U.S. Department of Veterans Affairs doesn’t set a specific VA loan credit score requirement. Lenders, however, can set their own minimum requirements for a VA loan. Most require a score of at least 620, but some go as low as 500.
What VA loan credit score do you need?
While the VA doesn’t set a minimum credit score for a VA loan, many lenders won’t accept a score below 620. So can you buy a house with a 600 credit score, or even a 500? The answer is likely yes. If you have damaged credit, make sure to shop around — low credit mortgage lenders do exist who will give loans to veterans with bad credit scores. VA loans can be accessible to those with scores in the 500s and low 600s.
However, as with any type of mortgage loan, the higher your credit score, the lower your interest rate offers will be.
What is the minimum credit score to buy a house?
| Loan type | Minimum credit score | FICO® credit score rating | Who sets the minimum? |
|---|---|---|---|
| VA | 500 | Poor | The lender |
| FHA | 500 (with a 10% down payment) | Poor | the U.S. Department of Housing and Urban Development (HUD) |
| USDA | 580 | Fair | The lender |
| Conventional (conforming) | 620 | Fair | Fannie Mae and Freddie Mac |
Can you get a VA loan with no credit?
If you have no credit history, don’t worry — you can use alternative methods of showing a VA loan lender that you have a history of repaying your debts and making on-time payments. Many bills you may have paid regularly for years — such as rent, utilities or a cell phone bill — can be used just like a standard line of credit to show a lender that you’re responsible and motivated to pay your debts. Sometimes called “alternative tradelines,” these bills and the financial relationships they represent can usually help you qualify for a VA loan if they’re at least a year old.
What are the VA loan credit requirements?
In addition to meeting your lender’s VA loan credit score requirement, your ability to handle other credit and debt obligations in the past 24 months will be scrutinized. This includes:
Rental and mortgage history
If you’ve paid your rent or mortgage on time over the last two years, VA lenders feel more confident that you’ll pay a new mortgage on time.
Last 90 days of credit activity
Lenders analyze your payment history, unpaid balances and monthly payments to see how well you manage debt, such as credit cards, student loans and car loans.
Employment and residency history
Recently discharged veterans should provide information about any deployments and military job experience if they have less than a two-year job or address history.
Federal debt
Government-approved lenders run your information through CAIVRS (Credit Alert Verification Reporting System) to verify that you have no delinquent federal debts, such as student loans or previous VA loans.
History of foreclosure or bankruptcy
VA guidelines allow you to take out a VA loan within two years of a foreclosure or Chapter 7 bankruptcy. That’s less than the three to seven years you’d have to wait to get a new conventional or FHA loan.
Debt-to-income (DTI) ratio There is no hard-and-fast rule about how much debt you can carry and still qualify for a VA loan. However, if your DTI ratio is above 41%, your underwriter will have to look into the reasons why and evaluate whether you can afford the loan.
Comparison shop no matter your credit score
Shop around and meet with at least three to five lenders before you decide on a loan. Whether you have a stellar or bad credit score, shopping with multiple lenders allows you to compare offers and loan terms side by side — a process that can save you thousands in the long run. Now is the time to ensure you’re getting a competitive rate with the lowest VA closing costs.
How to improve your credit score for a VA loan
You may be able to get a VA home loan with bad credit, but you’ll pay a higher interest rate and may end up with a higher monthly mortgage payment. A credit score of 740 or higher will earn you the most competitive interest rate offers.
Here are five simple steps you can take to pump up your credit score and snag a lower VA interest rate:
