What are the details on getting a VA Loan with a credit score of 550?

Asked by conniehndy, Tacoma, WA Wed Oct 9, 2013

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, ,
Wed Oct 9, 2013
It's going to be real tough. While VA guidelines dont' technically prohibit you from getting a loan with a super low credit score like 550, every lender I know of has a minimum credit score requirement, usually 600 or 620.

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 applicant’s past repayment practices on obligations are the best indicator of his or her willingness to repay future obligations. Emphasis should be on the applicant’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
2 votes
, ,
Thu Oct 10, 2013
Yes it used to be that you could do this. But the VA only guarantees the loan and most of the people putting up the money want a 640 credit score.

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
1 vote
Brian Nguyen, Mortgage Broker Or Lender, Mission Viejo, CA
Fri Feb 14, 2014
Hi Connie, The lowest score I have been able to give out VA loans for was 560. Since you are close, I would recommend working on your credit score a little bit to get you up 10 points. The simplest way to fix your credit score is to pay off your debt and revolving credit balance on time. I would recommend speaking to a lender like myself. I have give out VA loans and I would be glad to speak with you to help guide you through this process. Well I hope this helps! If you have any other questions or if you would like a loan, feel free to contact me. Good Luck! Brian Nguyen Sr. Mortgage Banker NMLS # 659743 Phone: 949.667.2887 brian.nguyen@nafinc.com
0 votes
Anna Matsuna…, Agent, University Place, WA
Fri Oct 11, 2013
Not very likely you will get a VA loan with scores that low. However, I am not a lender, I am a realtor, I have a couple of lenders I work with who specialize in VA loans and they could meet with you to help you know for sure and if not, they will help you put together a plan to get to the point where you can get the loan and the home you want. ( a step by step plan)

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.
0 votes
Steve Konwent, , Federal Way, WA
Thu Oct 10, 2013
Talk to a lender right away and have them assess your credit to see what can be done to increase your score. Getting approved with a low score can be tough but it can be done. The most important thing at this point is to be perfect with your credit right now. Make all payments on time, reduce your debt to credit limits, don't apply for credit cards, car loans, store credit cards etc. It's hard to say exactly what needs to be done without seeing the actual credit report but this is at least a start.

Let me know if you have any other questions.
0 votes
Jeanne Merola, Agent, Puyallup, WA
Wed Oct 9, 2013
I know someone that can help you. Let me know if you would like their info.
0 votes
Dan Tabit, Agent, Issaquah, WA
Wed Oct 9, 2013
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.
0 votes
, ,
Wed Oct 9, 2013


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
0 votes
Thanks, were are working on it. We are about 20 points away.
Flag Wed Oct 9, 2013
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