Sandra Dunn, Home Buyer in Arlington, TX

Praying to buy our first home using VA Loan

Asked by Sandra Dunn, Arlington, TX Thu Aug 23, 2012

Hello every one. My husband and I are looking into hopefully buying a home for our family using his VA Loan for our family. Problem is we both have low credit scores in the 500's. Is there a way we can still qualify?

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Kristyngarry, , 74338
Wed Sep 12, 2012
I am an underwriter for mortgage company (I approve, decline, suspend, counter mortgage loans that loan officers submit to a bank for approval. Yes, I'm the "bad guy"... and sometimes the good guy when I can make an approval), and recommend that you do NOT contact LexingtonLawFirm (read the horror stories online regarding people who have wasted their money trying to get that company to "fix" their credit.) Instead, go to, which is a free site, received rave reviews by Clark Howard on his MSN Money show, and which I personally use to monitor my credit (FREE). You can view the accounts that you have on your credit report, and get a TransUnion score - not an exact score as will be reflected on the bureaus, but it will put you in a very close ballpark of what your actual score is.

With my CreditKarma account, I get regular updates anytime anything new is added to my credit. Inquiry, increased credit score, decreased credit score, new account, paid off account, and anything else that happens. It's quite nice. Plus, you can log on as much as you want, and I like to log on and hit "update score" about weekly just to see how much the scores fluctuate in the normal course of business. It does NOT add any inquiries to your report or affect your score at all. And, if a lender is out there that can offer you a better deal on an account that you have (rate, terms, etc.), you'll see those offers come through and you can accept or not. I saved 2% interest on my car loan not too long ago by accepting one of the offers.

VA has no minimum credit score. Each lender that you speak with will have their own minimums. These are called "lender overlays". For the company I work for, it's 600. We can go to 580, but there are additional overalays to a 580 score, and max financing under a 600 score (at the lender I work for) is 90%. Even with a 600 credit score, you could be denied credit, depending on how your credit has been handled. I would say that the average lender has overlays to their VA program which requires a 620 or 640 minimum.

If you create an account at, you can see for yourself what you need to work on. Or go to Annual Credit (not freecredit which is a site you have to PAY to get a copy of your credit report via enrolling in their credit monitoring service). Federal Regulations allow you to get a free copy of your credit report annually.

Look over the whole thing, from each credit reporting agency. Equifax, TransUnion, and Experian. Equifax is easiest to work with as you can do it all online. (Ordering, the disputes, etc.) TransUnion and Experian still like the snail mail process, but it's well worth it.

Pay off anything that is in collections, pay down your credit cards to a maximum usage percentage of 20-30% or just keep a $10.00 balance on the cards / pay monthly to keep the cards active and thus boost your credit score, and make sure you and your husband each have at least three open and active trade lines that have been paid as agreed for at least 12 months. VA does not require any certain number of trade lines but you can bet if your whole bureau is derogatory in nature, you're going to have some work to do.

In short, get ready to play the credit game. Have a good balance of installment accounts (maybe one or two) and revolving accounts (one or two), and pay them on time without fail. Even if they are secured accounts that dont have a very high credit limit. Get them open, buy a tank of gas, pay it off in a couple of weeks so you dont pay interest to the creditor (keep track of billing cycles). Paying off collections can bump your score up, avoid any creditors making unnecessary credit inquiries, which your credit score will get hit for.

Dont close out any old accounts that were paid as agreed. Say you have a credit card that is not active, but is still open or a line of credit somewhere that is the same, leave it open. That gives you tenure in length of time accounts have been opened. Even closed accounts should be allowed to remain on your report if they are paid as agreed, because that gives you credit depth.

There are a lot of factors that go into a credit score and credit report, and I wish you the best of luck!
1 vote
Janet McCart…, Agent, San Diego, CA
Fri Aug 24, 2012
Hi Sandra,
Work on rising your credit scores. Many of the items report are incorrect or should have been removed.
Try consulting
I understand that they can help you and it will not cost you a lot of money.
Good luck
Janet McCarthy
Connect Realty
0 votes
Jerry Heard, Agent, San Diego, CA
Fri Aug 24, 2012
As others have said, this is a question best answered by a lender. My website has links to lenders that I work with and recommend. Please contact one of them to discuss your situation.

Best wishes

Local Help with Your Real Estate Needs

Jerry Heard
Your Broker
The San Diego Property Shop
Direct 619-920-9796
Office 619-269-5545
Fax 619-269-9168
CA DRE # 00648687
0 votes
Chris Francis, Agent, Murrieta, CA
Fri Aug 24, 2012
VA places a lot of emphasis on being on time. The best thing you can do right now is pay your bills on time. If it hasn't already been mentioned, I'll also recommend working with a patient lender that is experienced in VA loans. If you're buying in California, I recommend Laurie Allen at 951-203-4660 or email at She has helped many of Marines and Sailors devise a short term plan to get where they needed to be and I was able to get them into a home in short order. She is a great communicator and experienced VA lender.
Web Reference:
0 votes
Cory La Scala, Agent, San Diego, CA
Thu Aug 23, 2012
By the way, I have a really good lender when you're ready, that can close a loan as fast as a conventional loan, and often sooner. This will give you a competitive edge over other buyers with FHA or VA loans that often take 45 days.
0 votes
Cory La Scala, Agent, San Diego, CA
Thu Aug 23, 2012
Hi Sandra,

You may be able to find a lender to loan on lower credit scores, but you'll pay for it with higher interest rates, which equates to higher payments and less house you will qualify for.

It might be better to get your score up. I have some good information to help you do that. You'll see what holds the most weight with your score and how to improve those things. Once you understand where those score come from, you'll be in a better position to increase them.

Just email or call me off forum, and I'll be happy to send you this information.

Warm Regards,

Cory La Scala, REALTOR
Independence Realty
0 votes
Denise Gleav…, Agent, Claremont, CA
Thu Aug 23, 2012
Dear Sandra,

The lender I work with requires min score of 600 on VA, and this is what is common if not higher... Bigger banks have their min's set at 620 & 640 :-(
This is a relatively recent downgrade change over the last yr.

My recommendation would be that you have your complete credit profile analyzed for possible review and any Re- score possibilities to raise their score , and come up with a long term plan to get you to your goal eventually.

If I can be of further assistance, please contact me directly.
Best Wishes.

Denise Gleavey
"Your Realtor for Life"
Coldwell Banker Res. Brokerage
Local Direct (858)565-7777
Toll Free (800)735-5619

DRE Lic# 00999259

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0 votes
Rashard Scott, Agent, San Diego, CA
Thu Aug 23, 2012
I work with lenders that specialize in helping military families with VA loans. Feel free to visit my website or contact me directly by email or phone to discuss your options.


Rashard Scott
Keller Williams Realty
0 votes
Glen Etherin…, Agent, Orange, CA
Thu Aug 23, 2012
Hi Sandra, your credit record and history of payments and management of your debt is your most critical asset in using his VA eligibility. You must get your credit history in good shape before moving forward with buying a home in the current lending environment. Please consult an experienced VA lending professional or feel free to contact me at any time

Glen S. Etherington
NMLS #346658
Castle & Cooke Mortgage, LLC
0 votes
Noah Newbegin, , San Diego, CA
Thu Aug 23, 2012
Although VA does not have a minimum required credit score, most lenders require at least a 620, and I only know of a few that will go down to 580. If you are over 580, I can probably make it work so long there are other compensating factors (high, consistent, documented income.)

I can pull your credit, and give you some basic advice on how to raise your credit score.

Let me know,

Noah Newbegin
Ocean Mortgage NMLS# 322028
Senior Loan Consultant NMLS# 780201
Ph: 858-345-2776
Cell: 858-212-4794
Fx: 858-362-9177
0 votes
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