VA Loan Credit Score Requirements: Is There a Minimum?
What the VA requires, what lenders require, and why the two are not the same.
The VA does not require a minimum credit score for a VA home loan. That surprises many buyers, because almost every lender will still ask for one. The reason is that the VA guarantees part of the loan, but the lender makes the loan, and each lender sets its own credit standards on top of the VA's rules.
What the VA says
In its official Buyer's Guide, the VA states that it does not require a minimum credit score, but that most lenders use a credit score to help set your interest rate and manage their risk. The VA's own requirements focus on other things: that you are eligible for the benefit, that you will live in the home, and that you have enough income left over each month after paying your mortgage and other debts.
Why lenders still ask for a score
Lenders can add their own requirements, often called overlays, on top of the VA's rules. That is why one lender may approve a borrower that another turns down. Because requirements differ, the VA encourages borrowers to shop around for a lender that fits their situation.
Your score also affects the price of the loan. A higher score usually means a lower interest rate, and even a small difference in rate adds up over 30 years. Use the VA loan payment calculator to see how much a quarter or half point changes your monthly payment.
What lenders look at besides the score
- Payment history. Recent late payments, collections or a recent bankruptcy or foreclosure matter more than old ones.
- Residual income. The VA requires you to have enough money left each month after your mortgage and other obligations. This is a VA-specific test that most other loan types do not use.
- Debt-to-income ratio. Your monthly debts compared with your gross income. Try the affordability calculator to estimate yours.
- Stable income and employment, usually documented with pay stubs, W-2s or tax returns.
How to improve your chances
- Check your credit reports for free at AnnualCreditReport.com and dispute any errors.
- Pay every bill on time from now until closing. Recent history weighs the most.
- Lower your credit card balances, which reduces the share of available credit you are using.
- Avoid opening new accounts or making large purchases on credit before you close.
- Compare several lenders in a short window. The VA notes that multiple mortgage credit checks within 45 days are recorded as a single inquiry on your credit report.
What a better score is worth in dollars
Lenders price VA loans partly on credit score, so two borrowers with the same loan can get different rates. This table shows the effect of a half-point step on a $300,000, 30-year loan.
| Interest rate | Monthly principal and interest | Total interest over 30 years |
|---|---|---|
| 6.00% | $1,799 | $347,515 |
| 6.50% | $1,896 | $382,633 |
| 7.00% | $1,996 | $418,527 |
A one-point difference costs about $197 a month on this loan. That is why it can pay to spend a few months improving your score before you apply, if your timeline allows it.
A 90-day plan before you apply
- Day 1: pull all three credit reports and dispute any errors in writing.
- Weeks 1 to 4: pay credit card balances down below 30% of each limit, and ideally below 10%.
- Weeks 4 to 8: set up automatic payments so nothing is late. Do not close old cards, since that can raise your utilization.
- Weeks 8 to 12: request your COE and get quotes from three lenders within a few days of each other.
If your history includes a bankruptcy or foreclosure, read VA loans after bankruptcy or foreclosure for the waiting periods.
If a lender says no
Ask the lender exactly why, and whether the reason is a VA rule or the lender's own requirement. If it is the lender's requirement, another VA-approved lender may see your file differently. If it is a real issue, such as a recent late payment, ask how long you need to wait and what would change the answer.
Frequently asked questions
What is the minimum credit score for a VA loan?
The VA does not set one. Each lender sets its own minimum, so the score you need depends on the lender you choose.
Does my credit score change my VA loan interest rate?
Usually yes. Most lenders use your score to help set your rate, so a higher score generally gets a lower rate.
Will shopping around hurt my credit?
According to the VA, multiple credit checks from mortgage lenders within a 45-day window are recorded as a single inquiry.
What is residual income?
It is the money you have left each month after paying your mortgage and other obligations. The VA requires you to have enough of it, which helps make sure you can afford the home.
Can I get a VA loan after bankruptcy or foreclosure?
It may be possible after a waiting period, depending on the circumstances and the lender. Ask a VA-approved lender to review your history.
Are VA loan credit score requirements different in New York or other states?
No. The VA sets no minimum credit score anywhere, and a lender's minimum is the same whichever state the home is in. What does change by location is the residual income table, which has different thresholds for the Northeast, Midwest, South and West. If a New York lender turns you down on score alone, another VA lender may approve the same file.
What is the minimum FICO score for a VA loan?
The VA does not require a FICO score at all. In practice many VA lenders use about 620 as their floor, and some accept scores in the 580 to 619 range when the rest of the application is strong. Your interest rate is usually better above 680 and better still above 740.
Can I get a VA loan with a 580 credit score?
Possibly. Because the VA sets no minimum, approval depends on finding a lender whose overlay allows it and on strong compensating factors: a clean last 12 months of payments, residual income above the VA table, a modest debt-to-income ratio and some savings. Expect more documentation and a higher rate, and compare several VA lenders rather than accepting the first answer.
Sources
- VA Home Loan Guaranty Buyer's Guide (PDF)
- VA.gov: purchase loan requirements
- VA.gov: eligibility requirements
This page is educational and is not legal, tax or financial advice. Rules and rates can change, so confirm the details with the VA and your lender.