Trying to get a VA loan with bad credit might feel like you're shipwrecked with nowhere to go. Most lenders will tell you that you can't get a VA loan with bad credit, or more specifically, a credit score lower than 620. Don't be discouraged. This couldn't be further from the truth. I'll explain how to get a VA loan with bad credit and NOT be turned down.
The very first thing you should do if you feel you have a low credit score is ask the lender what their credit score requirements are. Most lenders will only lend down to 620 credit score. Therefore, there is no point in having a lender pull your credit if they can't even do the loan. Of course, too many credit pulls will only serve to lower your score even further, thus making it even more difficult to find a lender that can help. So you can see how first, finding a lender that will approve veterans under 620 becomes extremely important.
One of the most important things to know when looking for a bad credit VA lender is who underwrites the loan. Does that lender underwrite the loans or do they send the loans to an actual lender to underwrite? This is important because this type of lender has no say in whether your loan is approved or not and because of this, may not even know the guidelines or even specialize in VA loans. Expect a very painful process with this type of lender.
Can the Lender Help?
Some lenders can actually help you improve your credit score. Most lenders won't lend under 620 and even more won't lend under 600. What do you do if your score is say, 579? Ask the lender if they have any type of credit rescoring program. If so, and you have credit card debt with the ability to pay down a portion of that debt, that lender may be able to help you increase your score within days rather than having to wait months. Always ask for a copy of the credit score analysis. This will let you know what score you should expect. And always remember to find out what their minimum score requirement is.
Follow these simple steps and you should have no problems getting a VA loan with bad credit. For more information or to speak to a lender that offers VA loans with bad credit, inquire below.