Did your lender say that your credit score is too low for a VA loan? Most of the VA borrowers apply with a bad credit score and this may be one of the reasons why they get disqualified. However, many borrowers do not research well for the VA home loan process. Needless to say, they remain unaware of the minimum credit score requirements, too.
In this article, we mention the important things you must know about VA home loan credit score 550 in Virginia.
Required Credit Score to Buy or Refinance
Lenders like Clear Lending can help borrowers purchase or refinance a home when their credit score is as low as 550. While many lenders strictly avoid risky borrowers, some lenders offer flexible requirements. Meanwhile, you need to meet credit, financial, and income requirements to get approval for the loan.
Lenders review your credit history and notice whether you pay off electricity bills, housing costs, credit bills, and other financial obligations on time. If you pay your bills for 12 months right on time, there is almost no blow on your credit score. Payment history makes up a huge portion of your credit report. Once the lender sees your payments are cleared on time, you can get a new loan quickly.
You can get a VA loan even after having foreclosure or bankruptcy. You still have to meet particular requirements for the situation. On the other hand, refinancing into a VA loan makes sense when you are likely to stay in the new house for a long time. Just the way you follow the requirements when you want to purchase a home, the same process applies for refinancing.
When less-than-stellar credit is your concern, you can make use of streamline refinance. VA IRRRL also has a set of requirements that need to be met. You must be on the existing mortgage payments to be eligible for the loan.
Credit Score and VA Loans in Virginia
Credit scores leave an impact on the loan interest. If you have a low credit score, VA lenders might offer you a higher interest rate. Nevertheless, VA loans try to provide affordable interest rates.
If you are worried about your credit score, you should consider monitoring your score. Look for mistakes and it might improve your score. In addition, keep a track of your bills. When you pay the full bills, it is the perfect way to improve credit scores.