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Can you get a VA loan with bad credit?

Veterans with poor credit may still qualify

Veteran in wheelchair speaking with agent

VA home loans make buying or refinancing a home more affordable for veterans and active-duty military personnel who qualify. The benefits of VA loans include 0% down payments, competitive interest rates, and lower credit score requirements. Read on to learn more about the credit score you need to buy or refinance a home with a VA loan through Freedom Mortgage. 

Credit score you need to buy a house with a VA loan

At Freedom Mortgage, we can often help you buy a home with a VA loan when you have a credit score as low as 600. You will need to meet other credit, income, and financial requirements to get your loan approved.

We'll review your credit history and see if you pay your housing costs, credit card bills, and other loans on time each month. Paying your bills regularly for at least the last 12 months helps us determine if you can meet the financial obligations of a new mortgage.

We look at your income, assets, employment history, and other loan obligations to decide if you qualify. It is possible to get approved for a VA loan after bankruptcy or foreclosure. There are typically more requirements you need to meet, however.

Credit score you need to refinance a VA loan

At Freedom Mortgage, we can often help you refinance your home with a VA loan with an easy credit score qualification. Just like when you buy a home, you will need to meet other credit, income, and financial requirements to get your refinance loan approved.

You can often refinance a VA loan with less than perfect credit using a streamline refinance (also known as a "VA IRRRL"). There are eligibility conditions you will need to meet, however. For example, you need to be current on your mortgage payments and have a recent history of making your monthly payments on time to qualify for a VA IRRRL streamline refinance.

We can also help you refinance and get cash from the value of your home’s equity with a VA cash out refinance. We can often accept a minimum credit score as low as 550 when you want to tap your home's equity with a VA loan.

Does your credit score affect your VA loan interest rate?

Your credit score can affect the VA loan interest rate you are offered. When you have a lower credit score, you may be offered a higher rate by VA lenders. Similarly, a higher credit score might help you earn a lower rate. VA loans often have competitive interest rates because they are backed by the Department of Veterans Affairs. Ask us what interest rate we may be able to offer you - even if your credit is less than perfect!

Ways to monitor and improve your credit score

  • Check your credit report. You can get a free report on or contact each of the credit bureaus, Experian, Equifax and TransUnion, to receive your information.
  • Look for mistakes. If you find an error in your credit report, work to have it fixed. This can improve your credit score and help you qualify for a VA loan.
  • Don't max out your credit limits. Pay down as much credit card debt as possible and keep a low debt utilization ratio. This ratio compares how much credit you are using to the amount of credit you have available. For example, if you have a credit card with a $10,000 credit limit and a balance of $2,500, your debt utilization ratio is 25%.
  • Track your bills. Keep a calendar or set up reminders for when bills are due. Paying your bills in full and on time can improve your credit score.

Credit requirements for VA loans versus conventional loans

Veterans can also buy or refinance homes with conventional loans. Conventional loans typically have higher credit score and down payment requirements, however. You will also need to pay for private mortgage insurance (PMI) if you have less than 20% equity in the home while VA loans do not have mortgage insurance. Learn more about conventional loans versus VA loans. By refinancing, the total finance charges may be higher over the life of the loan.

Talk to Freedom Mortgage about VA loan financing with poor credit

Freedom Mortgage is happy to work with veterans who have lower credit scores. To speak with one of our loan advisors about buying or refinancing a home with a VA loan, please call 877-220-5533 or Get Started online.

1. Inside Mortgage Finance, 2021

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Get started today by getting a personalized evaluation of your home loan options from Freedom Mortgage.