Bad Credit? No Problem!
The VA doesn’t have a set FICO score requirement, but most lenders do. This means there may be a lender willing to help even if others won’t. Our VA loan specialists will assess your situation and work to find a lender who can assist you. Additionally, we can guide you on making adjustments to improve your credit and enhance your future loan opportunities.
Veterans with less-than-perfect credit may still qualify for a VA loan and potentially secure a favorable rate. The VA and lenders primarily consider the following factors:
- Collections, Judgments, or Liens: Any collections, judgments, or liens against the property may need to be addressed, either paid or subordinated.
- Credit Score: There are no strict minimum credit score requirements. While a score below 620 might result in a higher rate, certain programs may offer exceptions for credit scores in the 500s or below to secure the best possible rate.
- Current Mortgage Status: To qualify for a VA loan, you must be current on your mortgage and have no overdue balances from missed payments. Any past due late fee payments can be addressed through the payoff of your loan.
Most lenders offer a grace period, allowing payments to be made until the end of the month, even if they are due by the 15th. During this grace period, a late fee may be assessed if the payment is made past the due date. However, your payment will not be reported as late to the credit bureaus unless it is made or recorded on or after the 1st day of the next month.
- Late Payments: Most lenders prefer homeowners to have no late payments in the past 12 months. However, some lenders may provide exceptions if your credit has been re-established after a late payment, even within that 12-month period. You may need to provide a letter of explanation to demonstrate that you are now capable of making future payments reliably with your new lender.
If you have concerns about your credit, reach out to us. We can help you understand your options and work towards securing the best possible terms for your VA loan. Additionally, we offer credit repair suggestions to help you get back on track and potentially qualify for a lower rate.