VA Loans with No Minimum Credit Score
Fact: The Department of Veterans Affairs does not set a minimum credit score requirement. If you were told you need a 620 or higher, that’s a lender overlay — not a VA rule. At JD.Mortgage, we remove that barrier. We’ve helped veterans close with scores in the 500s, and in select cases even below 500, when the file meets VA’s true guidelines.
- No overlays on VA credit score minimums
- Manual underwriting expertise
- Lending in 49 states (NY excluded)
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Equal Housing Lender. NMLS #75243. Hybrid lender & broker.
What Is the Minimum Credit Score for a VA Loan?
There is no official minimum credit score required by the VA. That’s one of the most misunderstood parts of the program. The VA evaluates your overall ability to repay — not a single number. Many lenders add their own internal limits, commonly a 600–640 “minimum score.” Those are called overlays, and they are optional. The JD.Mortgage team does not impose a minimum score overlay for VA loans.
VA Loans with a 500 Credit Score (or Below)
Yes — you can often qualify for a VA loan with a 500 credit score, and in select situations even below 500. The key is proper file structure, strong residual income, and thorough documentation. While a 500-range score typically requires manual underwriting, approvals are possible when additional strengths are present. If your score is under 500, expect deeper documentation and compensating factors — it does not automatically mean denial.
Lowest Credit Score for VA Loan Approval
The VA does not set a numerical floor. The “lowest credit score” is determined by lender capability and the file’s overall strength. At JD.Mortgage, we review scores as low as the 400s. Approvals depend on payment history, residual income, and compensating strengths — not an arbitrary cutoff.
Why Do Lenders Say 620 Is Required?
Most lenders set a 620 minimum because it simplifies their process and reduces manual underwriting workload. That convenience shuts out many veterans who could qualify under VA’s true rules. This is why veterans are frequently denied unnecessarily. We specialize in removing that barrier and evaluating your file based on VA guidelines — not shortcuts.
What If I Had Late Payments or Recent Credit Issues?
Another common reason veterans get denied is because of late payments or credit challenges within the last 12 months. Many lenders automatically decline these files, even when the overall profile is strong. We recognize that service members and recently separated veterans can face extenuating circumstances such as deployments, PCS moves, medical events, or the transition to civilian life. We help you document and explain those circumstances so an underwriter can view the full picture — not just a score.
Bottom line: Recent late payments, collections, or other credit issues do not automatically disqualify you. With proper documentation and a strong residual income analysis, we can often move these loans forward when other lenders will not.
Credit Score Needed for a VA Loan
Some lenders insist that you “need” a specific number, but VA guidelines focus on whether you can repay the loan. The score needed is the one that allows an underwriter to see a responsible overall profile. That may be 700, 600, 500 — or in certain cases below 500 — if the rest of the file is strong.
How VA Approvals Work with Low Scores
- Residual Income — VA requires borrowers to meet minimum household residual income after debts. This is often more important than FICO alone.
- Payment History — Recent housing and installment history weigh more than older collections.
- Compensating Factors — Examples include cash reserves, job stability, low payment shock, or verified support that lowers household expenses.
- Manual Underwriting — If automated systems give “Refer,” we present your case to a VA underwriter using the actual guidelines.
How to Strengthen a VA Loan File with Low Credit
If your score is in the 500s (or below), these steps can improve approval odds:
- Lower revolving utilization — Aim for balances under 30% of each credit limit (under 10% is ideal). Even small pay-downs can help quickly.
- Correct reporting errors — Dispute and resolve inaccuracies; they are common drivers of low scores.
- Add alternative credit — Document on-time rent, utilities, insurance, or subscriptions where allowed.
- Build cash reserves — Even a few months of reserves can be a strong compensating factor.
- Organize income docs — Consistent, verifiable income makes manual underwriting smoother.
Frequently Asked Questions
What is the minimum credit score for a VA loan?
The VA does not require a minimum credit score. Many lenders use overlays (like 620), but we do not.
Can I get a VA loan with a 500 credit score?
Yes. With proper structure, residual income, and manual underwriting, approvals in the 500s are possible.
Can I qualify with a score below 500?
In certain cases, yes. Approval depends on residual income, payment history, and compensating factors.
What’s the lowest credit score for a VA loan?
There is no official cutoff. We review files with scores in the 400s when other strengths are present.
Why do lenders say you need 620?
That is a lender overlay — not a VA requirement.
Can I get a VA loan if I had late payments in the past 12 months?
Yes. Many lenders will not consider recent late payments, but VA allows flexibility when extenuating circumstances are documented. We specialize in building those explanations for service members and veterans.
Is residual income more important than credit score?
Yes. Meeting VA’s residual income test can outweigh a low credit score.
Do I need traditional credit lines?
No. VA allows alternative credit (rent, utilities, insurance) when documented properly.
Do you lend in all states?
We lend in 49 states (all except New York).
Get a Second Look Before You Give Up
Being told “no” by another lender doesn’t mean you can’t buy a home. VA loans were designed to expand access to homeownership — not to shut you out with unnecessary rules. The JD.Mortgage team at PRMG has no minimum score overlay and specializes in helping veterans close loans others said were impossible — even with scores in the 500s or below, or with recent late payments when extenuating circumstances are present.
Request a FREE Second Look
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Equal Housing Lender. NMLS #75243.