VA Loan Credit Score Requirements

The Department of Veterans Affairs does not impose a minimum credit score criteria for VA loans. The majority of private VA lenders do have their own credit score standards, albeit they might vary from lender to lender.

Key Questions

How do VA loan credit requirements compare to other types of home loans?
So what is the minimum credit score for a VA loan?
What credit scores do top VA lenders require?
Can I get a VA loan with my credit score range?
Can I get a VA loan if I have bad credit or no credit?
How do I improve my credit score for a VA loan?
Why should I improve my credit score for a VA loan?

VA Loan Credit Requirements Compared to Other Home Loans

In comparison to other home loan options like conventional, FHA, and USDA loans, VA loans are more advantageous to potential borrowers due to a variety of variables, one of which is the eased credit standards. The typical credit criteria for each loan type are summarised in the following table:

Loan Type	Minimum FICO Credit Score	Minimum Set By...	Required Down Payment (% of Purchase Price)
Conventional	620-680	Private lenders	3%-20%
FHA	500-580	FHA	3.5%-10%
USDA	No set requirement	Private lenders	0%
VA	No set requirement	Private lenders	0%

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Why are credit score requirements for VA loans less strict?

Private VA lenders are better protected since VA loans are guaranteed by the government, therefore they are more able and willing to approve applicants with lower credit ratings. Although the VA does not directly issue loans, it does partially guarantee loans for borrowers who satisfy the requirements to be considered eligible for a VA home loan. This guarantee lowers the risk for the lender and encourages them to extend credit to borrowers who would not otherwise qualify due to their poor credit history.

What is the minimum credit score for a VA loan?

There is no minimum credit score needed to be approved for a VA loan, according to the Department of Veterans Affairs (VA). To fund the mortgage, most VA lenders will need a credit score of at least 620 FICO.

2023 VA Loan Credit Score Requirements for Top Lenders

As already said, each lender will have a different minimum credit score requirement for VA loans. In 2023, the following are some samples of credit scores that some of the best VA lenders will be searching for:

Veterans United Home Loans: 620 minimum credit score
Navy Federal Credit Union: 620 minimum credit score
USAA: 620 minimum credit score
Fairway Independent Mortgage: 600 minimum credit score
Rocket Mortgage: 640 minimum credit score
DHI Mortgage: 620 minimum credit score
Movement Mortgage: 580 minimum credit score
Caliber Home Loans: 580 minimum credit score
Guaranteed Rate Inc: 620 minimum credit score

Credit Score Ranges for VA Loans

Although there isn’t a predetermined minimum credit score needed for VA loans, you might be interested in knowing how your particular credit score will fare during the application process. See how many borrowers similar to you successfully closed on their VA loans in each credit score category last year by looking at the chart below:

FICO Credit Score Range	Number of VA Loans Closed in 2022
500-525	466
525-550	792
550-575	1,795
575-600	5,107
600-625	27,979
625-650	60,653
650-675	69,854
675-700	71,269
700-725	65,697
725-750	63,707
750-775	67,387
775-800	70,413
800-825	32,554

Remember that when VA lenders are assessing you as a possible borrower, a number of criteria other than your credit score may be taken into account, such as your debt-to-income ratio or if you have a co-signer or co-borrower. Contact a VA-approved lender to find out more details about your particular financial status and to find out if you qualify for a VA loan. Using a VA Loan Affordability Calculator, you may also determine your own estimate of the property price range that will meet your budget.

How do I figure out my credit score for a VA loan?

Finding out your personal credit score is a crucial first step in the VA loan application process. There are several readily available tools to help you explore your own credit history if you are unsure of where to begin. To understand more about credit and to get a free credit report right away, go to AnnualCreditReport.com. Remember that your credit score may occasionally differ from the number your mortgage lender will be considering if you obtain it from a credit reporting site. While credit reporting websites frequently employ credit scores produced by general scoring models, lenders frequently obtain your credit report and look at FICO credit scores that are developed expressly for mortgage loans. This distinction may or may not affect your ability to obtain a VA loan, but it’s still something to think about when assessing your personal credit score.

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Can I get a VA home loan with bad credit?

You are not the only one who has been asking oneself this question! Many prospective borrowers worry about entering the VA loan application process with poor credit or no credit because of this. A February 2023 Experian study states that the average FICO credit score nationwide is 714.

Experian adds that credit ratings under 670 are classified as “fair” or “bad.” To be eligible for a VA loan, borrowers must have a minimum FICO credit score of 620, according to the majority of VA lenders.

You shouldn’t give up on your dreams of becoming a homeowner even if your credit score is below this threshold or you have little to no credit history. You may take a number of actions to develop or enhance your credit and raise your chances of being approved for a VA loan.

How to Improve Your Credit Score for a VA Loan

There are methods you may use if you have poor credit or a low credit score to raise your creditworthiness and raise your chances of being approved for a VA loan. You can follow the instructions listed below:

Improve your money management skills by developing sensible financial practices including debt reduction and avoiding missed payments or defaults.
Pay bills on time: To demonstrate your dependability in meeting your financial commitments, pay all of your payments on time, including credit card, loan, and utility bills.
Keep an eye on your credit utilization: Keep your credit card balances close to the credit limitations you have available. Aim to utilise a small portion of your available credit—under 30% is a commonly recognised guideline—as high credit utilisation might harm your credit score.
Work with a knowledgeable credit expert: You might want to consider getting advice from a credit consultant or financial adviser who can make recommendations that are particular to your present financial circumstances.

Benefits of a Good Credit Score for a VA Loan

Along with helping you qualify, a strong credit score may have a big influence on your VA loan experience. When applying for a VA loan, borrowers with credit scores in the 720–740 range can frequently anticipate better rate arrangements, cheaper fees, and more competitive interest rates.

Strong credit score borrowers could also have access to lending programmes with bigger loan amounts and more accommodating payback terms. Furthermore, keeping a good credit history may speed up the loan approval procedure, giving applicants quicker access to money for house purchases or refinancing existing loans. These benefits might result in substantial cost savings over the course of your loan, so it would be wise to concentrate on raising your credit score before submitting an application for a VA loan.