If you’ve served in the military and want to buy a home, the VA loan is one of the best tools available to you. But what if your credit isn’t great? That’s one of the most common questions we hear, and the good news is, having bad credit doesn’t automatically disqualify you.
Life happens. Late payments, medical bills, or past financial setbacks don’t mean homeownership is off the table. In fact, VA loans are specifically designed to make buying a home more accessible for veterans and service members, even those with credit challenges.
In this article, we’ll break down how VA loans work when your credit score isn’t perfect, what lenders actually look for, and how Select Home Loans can help guide you through the process.
Is There a Minimum Credit Score for a VA Loan?
Technically, no. The Department of Veterans Affairs doesn’t set a minimum credit score requirement. That’s part of what makes VA loans so flexible. The VA guarantees a portion of the loan, which gives lenders more confidence even if your credit history isn’t spotless.
But here’s the catch: lenders still set their own credit score guidelines. While the VA doesn’t enforce a minimum, most lenders do. Many look for a score of at least 580–620, though some may go lower depending on the rest of your financial profile.
At Select Home Loans, we work with a wide network of VA-approved lenders, including some who are willing to consider applicants with scores in the low 500s, as long as there’s a solid explanation and the rest of the application is strong.
So if your credit score is less than ideal, don’t count yourself out. With the right lender and guidance, it’s still possible to move forward.
What Is Considered “Bad Credit” for a VA Loan?
“Bad credit” is one of those terms that gets thrown around a lot, but it can mean different things depending on who you ask, and which lender you’re dealing with.
In general, most lenders consider a credit score below 580 to be poor. Scores between 580 and 619 are often viewed as “fair,” and anything 620 and up starts to open more doors. But credit isn’t just about a number. Lenders also look at the story behind that number.
Here are a few common things that can hurt your credit profile:
- Late or missed payments on credit cards, loans, or utilities
- Accounts in collections
- High credit card balances
- Bankruptcies or foreclosures in the past few years
But here’s what makes VA loans different: they allow lenders to use manual underwriting if needed. That means your loan can be reviewed by a real person, not just a computer, and they’ll look at your full financial picture, not just your credit score.
So even if your score is below the traditional cutoff, you might still get approved if you’ve shown recent financial stability, steady income, and responsible budgeting. That’s why working with the right lender matters. Some won’t even look at an application below a certain score. Others, like the lenders we work with at Select Home Loans, are more willing to consider your full story.
How VA Loans Help Buyers with Less-Than-Perfect Credit
If you’ve had credit issues in the past, most mortgage programs can feel like they’re working against you. High down payments, strict score requirements, and expensive mortgage insurance can make homeownership feel out of reach. VA loans change that.
Here’s why they’re often the most forgiving option for borrowers with low or damaged credit:
1. No Down Payment Required
You can finance 100% of your home’s purchase price with a VA loan. That means you don’t need to spend years saving up 10% or 20%, a huge advantage if your credit struggles were tied to cash flow issues in the first place.
2. No Private Mortgage Insurance (PMI)
Conventional loans often charge monthly PMI if you put down less than 20%, and the cost goes up if your credit score is low. VA loans skip that entirely. No PMI, no extra fees tacked onto your monthly payment just because your credit isn’t perfect.
3. Competitive Interest Rates
Even with a lower score, VA loan rates are typically better than what you’d get with other loan types. Because the loan is backed by the Department of Veterans Affairs, lenders take on less risk, which means you get better pricing.
4. Flexible Underwriting
VA loans allow for manual underwriting, which means a real person reviews your file. They can take things like recent job stability, savings habits, or a written explanation of past financial trouble into account. That’s something most automated mortgage systems don’t do.
Tips to Improve Your Chances with Bad Credit
Even though VA loans are flexible, having stronger credit always helps. If you’re sitting on the edge of approval, or just want the best terms possible, there are a few simple moves you can make that can go a long way.
1. Pay Down Revolving Debt
If your credit cards are maxed out or close to it, paying them down can improve your credit score quickly. Aim to keep your balances below 30% of your credit limit. Even a small payment can make a difference in how lenders see your risk.
2. Don’t Open New Accounts
Applying for new credit cards or loans right before applying for a mortgage can hurt your score. It also raises red flags for lenders who may wonder why you’re suddenly taking on new debt.
3. Avoid Major Purchases
Now’s not the time to finance a new car or upgrade your furniture. Big purchases that increase your debt load can throw off your debt-to-income ratio, and hurt your approval chances.
4. Write a Letter of Explanation
If you had a rough patch, maybe due to medical bills, divorce, or job loss, a short written explanation can help. Lenders doing manual underwriting will read it, and if your situation has stabilized, they may still approve your loan.
5. Check Your Credit Report for Errors
Mistakes happen more often than you’d think. A paid account might still show as delinquent. A duplicate account could drag your score down. Review your report and dispute anything that doesn’t look right.
6. Work With a Lender That Knows VA Loans
Not all lenders are willing to work with lower credit scores. Some just won’t bother. At Select Home Loans, we partner with VA-friendly lenders who are open to looking at your full financial picture, not just the score on the screen.
Even if you’re not ready to apply tomorrow, starting these steps now can put you in a stronger position in a matter of weeks, not years.
Alternative Options If You Don’t Qualify Right Now
Sometimes, even with all the flexibility of a VA loan, the timing just isn’t quite right. Maybe your score is too low, your debt is too high, or there’s something in your credit report that needs time to clear. That doesn’t mean the dream is dead, it just means there’s a different path forward.
Here are a few options if you’re not quite ready yet:
1. Create a Short-Term Credit Improvement Plan
You’d be surprised how much progress you can make in just 3–6 months. Paying down debt, disputing errors, or setting up a few on-time payments can nudge your score up enough to qualify. At Select Home Loans, we’ll walk you through a custom plan based on where you’re starting from.
2. Consider an FHA Loan as a Backup
While VA loans are ideal for veterans, FHA loans are another government-backed option designed for buyers with less-than-perfect credit. You’ll likely need a higher down payment and will have to pay mortgage insurance, but it’s worth considering if you need a stepping stone.
3. Get Pre-Counseling From a VA-Experienced Lender
A good loan advisor won’t just say “no” and hang up, they’ll help you understand why you didn’t qualify and what it’ll take to get there. That’s exactly how we operate at Select Home Loans. We’ll give you honest feedback, not false promises, and help you build a plan that makes sense.
4. Use This Time to Strengthen Other Areas
Your credit score is only one piece of the puzzle. Building savings, reducing debt, or even taking on a side gig to increase your income can all help you qualify when you’re ready to reapply.
Why Choose Select Home Loans for VA Loan Help
If you’ve served this country, you deserve a lender who will serve you, with honesty, patience, and real solutions. At Select Home Loans, we understand that life doesn’t always leave your credit spotless, and that shouldn’t stop you from owning a home.
We work with veterans across Florida, many of whom come to us thinking they’re not qualified. More often than not, they’re closer than they think.
Here’s what makes us different:
- We understand VA loans inside and out.
Not all lenders specialize in VA loans. We do. That means we know how to navigate the guidelines, work with underwriters, and advocate for you. - We work with lenders who consider the whole picture.
A credit score is just one part of your story. We help connect you with lending partners who are open to manual underwriting and real-world explanations, not just credit reports. - We build plans, not pressure.
If you’re ready to apply, great, we’ll guide you through every step. If you need time to improve your credit, we’ll help you map out what that looks like. Either way, you get clarity. - We’re based in Florida and know the market.
That matters when you’re planning for taxes, insurance, and property values. Local expertise means better guidance.
We don’t just want to get you a loan, we want to help you make a smart, sustainable move that supports your life for years to come.
FAQs About VA Loans and Bad Credit
Can I get a VA loan if I’ve had a bankruptcy or foreclosure?
Yes. VA guidelines allow for borrowers who’ve gone through bankruptcy or foreclosure, as long as enough time has passed (typically 2 years for Chapter 7 and 1 year of on-time payments for Chapter 13). Every situation is different, but it’s far from a dealbreaker.
Will I need a co-signer if my credit is low?
Usually, no. Most VA loan applicants don’t need a co-signer, but in some cases, adding a creditworthy spouse or partner can help with approval, especially if your income or credit is borderline. However, co-signers must generally live in the home with you.
Can I use a VA loan more than once?
Yes. If you’ve used a VA loan before and either sold the home or paid off the loan, you can use your VA benefit again. There are also situations where partial entitlement is still available even if you haven’t sold the previous home.
Does the VA only look at my credit score?
No. While lenders will review your score, the VA encourages them to also consider your full financial profile, income, employment history, debt-to-income ratio, and the reason for past credit issues.
Can I get approved if I don’t have much credit history?
Possibly. In some cases, alternative credit, like rent, utility, or phone bill payment history, can be used to show financial responsibility. A lender experienced with VA loans can help present that properly during underwriting.
Bad credit doesn’t mean the door to homeownership is closed, it just means you need the right lender who knows how to get it open. And we’re here to help with that.
Take the Next Step with Confidence
Your credit score is just one chapter in your story, not the whole book. If you’re a veteran or service member who’s ready to buy a home, don’t let a low score hold you back from exploring your options.
VA loans were built for people like you. They’re flexible, forgiving, and often the best path to homeownership for those who’ve served. Even if your credit isn’t perfect, there may be a way forward, and at Select Home Loans, we’re here to help you find it.
Whether you’re ready to apply today or just need answers to a few questions, we’ll meet you where you are. No pressure. Just guidance, from people who care about getting you into the right home the right way.
Let’s talk.
Reach out for a free consultation with our VA loan team. We’ll help you understand your credit, explore your options, and create a plan, whether you’re ready now or just getting started.
