What Is the Minimum Credit Score for a VA Loan? A 2024 Guide

For veterans, active-duty service members, and eligible spouses seeking to buy a home with no down payment, the VA loan is a powerful benefit. While the U.S. Department of Veterans Affairs (VA) does not set a formal minimum credit score, most mortgage lenders require a minimum credit score of 620 for VA loan approval. Some lenders may accept scores as low as 580 under specific conditions, but a higher score significantly improves your chances for better interest rates and terms. This guide breaks down the credit requirements and how to strengthen your application.

How Do Lenders Set VA Loan Credit Score Requirements?

The VA itself does not mandate a specific credit score; instead, it guarantees a portion of the loan against default, which encourages lenders to offer more favorable terms. However, individual lenders set their own underwriting standards (the criteria used to assess a borrower's risk) to protect their investment. A 2024 survey by the National Association of Realtors found that 36% of buyers who compared multiple pre-approvals did so to secure a better rate, highlighting the importance of shopping around.

Lenders evaluate your entire financial profile, but your credit score is a primary factor. A score of 620 is the most common benchmark because it represents an acceptable level of risk. When your score is near or below this threshold, lenders will scrutinize other aspects of your application more closely.

Can You Get a VA Loan with Bad or No Credit History?

It is possible to be approved for a VA loan with poor or limited credit. Lenders recognize that military service can impact the opportunity to build a traditional credit history. They often use compensating factors (strengths in your financial profile that offset weaknesses) to make a lending decision. Key factors they consider include:

• Debt-to-Income Ratio (DTI): Your DTI is a calculation of your total monthly debt payments divided by your gross monthly income. A DTI below 41% strongly indicates to lenders that you can manage your mortgage payment alongside existing obligations, which can help compensate for a lower score.
• Residual Income: This measures the monthly income remaining after taxes, debt payments, and household expenses. VA lenders have specific residual income guidelines because it is a direct indicator of your ability to cover living costs and save for emergencies.
• Payment History: Lenders will review your history of making payments on obligations like rent, car loans, and utilities over the past 6-12 months. A consistent record of on-time payments can bolster your application, while late payments are a significant red flag.
• Loan Amount and Down Payment: While VA loans require no down payment, offering one can reduce the lender's risk. A down payment lowers the loan-to-value ratio, which may make a lender more willing to work with a borrower whose credit score is below their typical standard.

How Do VA Loan Credit Requirements Compare to Other Loans?

A significant advantage of the VA loan is its more lenient credit requirements compared to other major loan types. The following table provides a clear comparison of typical lender minimums.

Conclusion: Taking the Next Steps

Securing a VA loan with a lower credit score is achievable by presenting a strong overall financial picture. Aim for a credit score above 620 to access the widest range of lenders and best rates. Before you apply, focus on improving your key compensating factors:

• Check your credit report for errors and dispute any inaccuracies.
• Lower your DTI by paying down existing credit card balances or other debts.
• Gather documentation of 12-24 months of consistent, on-time rent payments.
• Get pre-qualified with multiple lenders. Based on our experience assessment, comparing offers from several VA-approved lenders is the most effective way to find a loan program that fits your unique financial situation.