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How to Get a VA Loan with Bad Credit

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Your credit score may only be three numbers, but those three numbers have a huge impact on your finances—especially when it comes to borrowing money for a VA loan. Your credit score is one of the main factors lenders take into account when deciding whether or not to grant you a mortgage.

If you have bad credit, you don’t need to give up your dreams of home ownership. For Veterans and military members, you may still be able to get a home with a VA loan.

VA Loans and Credit Requirements
Lenient credit requirements are one of the many perks of a VA loan. Mortgage lenders use the FICO scoring model, and most require a credit score of 640 in order to be eligible for a VA loan. However, NLC Loans can underwrite VA loans for those with scores as low as 580.

With conventional loans, a score of 620 would probably not be high enough to qualify for a loan. Other lending options may approve you with a 620 score, but you’ll probably pay a higher interest rate. However, the VA loan program does not base interest rates on credit score.

How to Get a VA Loan with Bad Credit
If you have bad credit, you don’t have to give up your dream of owning a home. You can still get a VA loan with a time and effort on your part. You can raise your credit score to an eligible rate by doing these things:

Check your credit report. Many credit reports have errors, including accounts that aren’t yours, old negative marks that should have fallen off your report, and collections you may not be responsible for. If you find errors, dispute them with the credit reporting agencies.

Pay all bills on time. Whether or not you make your payments on time accounts for 35 percent of your score. Make sure you pay all payments on time. The longer you make timely payments, the more your score will go up.

Pay down credit. If you have multiple maxed out credit cards or lines of credit, it could be hurting your score. Pay down your credit cards and don’t open up any new lines of credit, and you’ll see your score start to climb.

Use Your VA loan benefits
A bad credit score can leave you feeling frustrated, especially if you want to buy a home. However, if you qualify for a VA loan, you don’t have to have stellar credit to purchase a home. With a little patience and diligence, you can bring your score up and buy the home of your dreams.

Get Help with VA Loan Qualification
For more information about VA loan qualification, including whether or not you qualify based on your credit score, contact one of NLC Loans’ personal mortgage advisors toll-free today at 1-877-480-8050.