VA Mortgage Credit Requirements

:: “…VA Mortgage Credit Requirements are much easier than a conventional loan – which is by far one of the greatest advantages of the VA loan program “

VA Mortgage Features

  • Your low FICO score not an issue
  • Credit history for last 12 months considered only
  • Collections OK
  • 3 year bankruptcy rule

Getting Started With a VA Application

Basic VA application information needed – You’ll need this information when you meet with your loan officer in order to process your VA loan application:

  • Current address ( past 2 years)
  • Social Security #
  • Employer names and addresses for the past 2 years.
  • Income – gross monthly
  • Do you currently own real estate? if yes you’ll need to provide any existing loan information.
  • Your VA eligibility forms – DD Form 214
  • If self-employed or contract worker, tax returns or W2 for the last 2 years, also bring current pay stubs
  • Closest relative to you , name, address and phone number

VA Mortgage Credit Requirements – Compared to qualifying for a conventional loan, a US guaranteed loan like a VA home loan is far more lenient regarding credit requirements. If your member of the US military, current or retired and are seeking a VA loan, a summary of credit requirements and guidelines is provided below:

Credit Score Requirements

VA Qualification not based on FICO score – With conventional loans, your 3 digit FICO score plays a huge role in what interest rate you will be qualified for, or if you even get a loan for that matter.

Not so with VA loans. VA looks at your 1 year bill paying history as an evaluation or predictor of your credit-worthiness. Basically, a lender processing your VA loan will not want to see any late payments within 12 months ( some allow 1 30-day late payment within a 12-month period on a trade line – you’ll need to inquire)

As you can guess, this a huge advantage for some military personnel that have been marked with a low FICO score due to late payments in the past. Since your negative late payment information reported to the credit bureaus STAYs on your credit report for 7 years, qualifying for a conventional loan is almost impossible, especially if you’ve experienced any financial turmoil while on active duty. The VA realizes that this financial scenario is quite common with Vets and their families.. thus allowing negative credit information to be ignored to a greater degree.

If you have open trade lines fine, but if you have not established traditional credit – NO PROBLEM

Non Traditional Credit Allowed

VA Allows Non-Traditional Credit If you have not taken out an auto loan, credit card, or student loan you have no traditional credit history with the major credit bureaus on which to compute a credit score.

However, this is not an issue in qualifying for a VA home loan – these non traditional credit sources are valid for VA loans: Utility payments, rental payments, auto insurance payments, cable and telephone payments, or proof of positive savings deposits in a bank.

You’ll need to present your paid bill reciepts in order to prove your credit worthiness regarding these non traditional credit sources, so be prepared and keep track of your documents.

Keep in mind, a lender will look closely at your 12 month rental payments to ensure they were paid on time.


Collections permitted You can have cretain collections if reasons for non payment are explained to the lender ie. medical


Judgements NOT permitted Even for VA loans these must be cleared before a lender will qualify you for a VA mortgage loan.


3 year rule – VA rules regarding bankruptcy state that 3 years must pass before you will be considered for a VA loan – any loan within 3 years of a bankruptcy is concidered too risky.