How to Get a VA Loan with Bad Credit

A common misconception is that you need to have a perfect credit score and a large savings account in order to purchase a home.  This could not be further from the truth.  For most Lenders, they look for a minimum credit score of 620 although this can change depending on your individual situation.  VA Loans also allow for 100% financing for those who qualify.  For more information on how to get approved for a VA Loan without perfect credit in Columbia, SC, Lexington, SC and Sumter, SC please call me today!

How to get a VA Loan with Bad Credit

Here is how to get a VA loan with Bad Credit.

  1. Run a credit report

  2. Lower the balances on your credit cards

  3. Open a secured credit card

  4. Eliminate Finance company accounts

  5. Work with a quality VA loan lender


Run a credit report

In order to know what your current credit situation is, you need to know your scores and the current status of all your credit accounts.  Many times there are inaccuracies on the credit report and they might need to be corrected prior to purchasing.  Also, most online credit monitoring companies don’t reflect accurate scores and you might qualify for a VA loan now!  You might think you have bad credit but your scores may be better than you think.

 How to get a loan with a score below 620

Obtaining a VA Loan with a score below 620 is sometimes easier than most people think.  Because VA Loans are typically initially underwritten through an Automated Underwriting System, the total credit profile of the borrower is factored into the underwriting decision.  So, there are many other factors that are considered such as: length of time on job, assets, debt to income ratio, etc.  So, if a borrower has a low debt to income ratio, a 401K or other liquid assets, there is a good chance for an Approval even with bad credit.

 How to improve your FICO scores

Improving your scores can require several months or can be as quick as a few days.  If the borrower has multiple late payments and collections, the time required could be several months.  However, some quick ways to improve your credit score are: lowering the balances on your credit cards below 30% of the balance, opening a secured credit card and eliminating Finance company accounts.  If you would like help or more information, please call now 803 261 9267!  Having an VA Loan or a Jumbo mortgage expert guide you through the process of obtaining a loan with bad credit is critical.

Why a local mortgage company is so valuable

If you are a Veteran or Active Duty Military, national Military connected mortgage companies have large volumes of mortgage applicants and stricter guidelines.  As a result, they don’t have the ability or desire to work with people looking to get a VA Loan with bad credit.   Local companies will give more time and attention to people who may have some credit challenges.  Additionally, local companies usually have more flexibility with Underwriting Guidelines when it comes to people looking to get a VA Loan with bad credit.  So, if you have questions or need personalized attention in getting a VA Loan, call the Cain Mortgage Team today!


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