The credit score is not just a number, it's a reflection of the information contained in your credit report. If you have a credit score in the mid 500's, then it's very likely you have a history of late payments (probably recent too) and/or you may have accounts in collection or judgments.
VA guidelines say:
The applicantâ€™s past repayment practices on obligations are the best indicator of his or her willingness to repay future obligations. Emphasis should be on the applicantâ€™s overall payment patterns rather than isolated occurrences of unsatisfactory repayment. Determine whether the applicant (and spouse, if applicable) is a satisfactory credit risk based on a careful analysis of the credit report and other credit data.
So generally, an underwriter is going to want to see that any derogatory items on your credit report are satisfied/paid off and that you have re-established a good credit history. Again, this is straight from the VA underwriting guide: In circumstances not involving bankruptcy, satisfactory credit is generally considered to be reestablished after the veteran, or veteran and spouse, have made satisfactory payments for 12 months after the date the last derogatory credit item was satisfied. For example, assume a credit report reveals several unpaid collections, including some which have been outstanding for many years. Once the borrower has satisfied the obligations, and then makes timely payments on subsequent obligations for at least 12 months, satisfactory credit is reestablished.
I hope this helps. I don't want to dash your hopes at all. Just wanted to point out that with a 550 score it's likely that you will have to put in some work and improve the credit history before you can get a loan. Best of luck!
Tony Grech | Mortgage Loan Originator | NMLS 977416
PMAC Lending Services, Inc.
Direct (248) 945-9070 ext. 278
Toll-free (855) 642-4762 ext. 278
Mobile (313) 622-7383
My company goes down to 600.
I can not do loans in Washington, as a service to someone who has served our country I would gladly coach you in order to get your credit score up where you need it be. I do that for my customers all of the time.
My phone number is 949-297-1207
Let me know if you would like that type of help, would be glad to set you up for an appointment with one of them.
Let me know if you have any other questions.
You've had a couple of lenders weigh in on your chances, and so far it's not encouraging. I do have some suggestions for you however. First, the score you obtained may not be the ones a lender gets when they order your reports. Lenders pull all three credit reports and generally use the middle score. Yours may be higher or lower than what you've reported.
Your score is a reflection of your credit patterns, but this can change and your scores can improve. Since you have a credit report, review it and see if the information is accurate or not. If you find errors, go to the reporting companies site, create an account and dispute them. You'll need proof, like a recent statement from the creditor showing you paid on time, or the balance is lower.
Next, pay down any balances you have to 1/3 or less of their high credit and keep your balances low. Low balances on credit accounts show self control and credit worthiness. Don't close any accounts, this will further lower your scores. Just pay them down and keep them open.
Finally, create a budget if you don't have one and put your bills due date on the calender. Pay them early for a while and establish good history.
Following these habits will restore your credit, raise your scores and improve you chance for approval. As others have said, it's not just your scores, it's your overall credit history. The sooner you put this into effect the sooner you can own, and this can happen sooner than you might think. Best of luck and let us know how things turn out.
550 score is likely too low to obtain a VA loan in Pierce county ......600 min middle score needed ...what are your 3 scores ? IS the score you reference one you pulled yourself or one you received from a lender ?
Possible to try to " work " on report to try to get scores up slightly
let us know if we can assist ...
Dave Skow - WA MLO #278613
w 206 714 9745