VA Loan with Bad Credit – Scores 500-620

va loan with bad credit

VA loans are available with no down payment requirement for veterans, active military and their spouses with credit scores as low as 500. It is one of the better mortgage programs available and a great benefit to our deserving veterans.

VA loans are also available for credit scores as low as 500. However, many lenders have their own minimum credit requirements of 620 or more which makes it difficult for some veterans to qualify for a VA loan.

VA Loan Requirements with Bad Credit

The requirements for VA loans are more flexible than any other loan program available. Here are the basic requirements:

  • Eligible applicants must be a veteran, active military or spouse with available home loan entitlement
  • You must occupy the property as your primary residence
  • Two-year work history and/or active duty
  • No down payment needed
  • Typical credit score requirement of 620 or more
  • No specific DTI requirement
  • No maximum purchase price

If the DTI or purchase price are very high, the lender may ask for a down payment.

Why Some VA Lenders do Not Accept Poor Credit

VA lenders are protected from part of the loss in the event of a foreclosure or default. The amount they are insured for by the VA based upon your entitlement calculation so it is not a 100% coverage or guarantee by the VA.

The coverage against loss is good for the lenders but they are still not covered 100%. They are also in the business of making money and if the borrower is not making the mortgage payments, then the lender still has some risk. It is for this reason why lenders have their own credit score minimums.

Borrowers with lower credit scores typically struggle to make debt payments which is why their credit scores are lower. Lenders do not have an appetite for dealing with late payments and starting the foreclosure process is not good business for VA lenders.

Lenders who Can Offer a VA Loan with Bad Credit

The larger and most recognizable lenders in the industry do not accept lower credit scores. We will outline a few of those below and will describe what their credit requirements are.

The lenders who can help with credit scores down to 500 are typically mortgage wholesalers. They do not work directly with the public but instead use a broker network. This means you cannot apply directly with them. We can help you to find the lender who can help you by completing the short loan scenario form.

These are some of the lenders who can help with a VA loan with bad credit.

Lender Credit Score
Carrington Mortgage Services 500
AFR Wholesale 500
Access Capital Group 500
Barklay Butler Financial 500

Lender guidelines are changing constantly and the lenders referenced above are just a small sampling and may not be the best option for you. Let us help you to find you a VA loan with bad credit.

Veterans United

Veterans United is the most popular VA lender in the United States. However, they have very high credit standards and require a 660 credit score. This leaves many lenders who are unable to qualify when applying at Veterans United. They also have overlays and other requirements that may exclude you even if your credit is over 660.

Quicken Loans

Quicken Loans is a high-volume online lender who also can help with VA loans. Their minimum credit score requirement is 620. This is better than Veterans United but still not low enough to help borrowers with poor credit.

Rocket Mortgage

Many people do not realize that Rocket Mortgage is part of Quicken Loans. As a result, their credit score minimum for a VA loan is also 620


LendingTree is a lender match service and not a lender. Therefore, they do not make the decision about what the VA credit score requirements are. The lenders they refer you to will likely have credit score requirements of 620 or higher. Be prepared to get many solicitations if you contact LendingTree. See our LendingTree Review here.

No Overlay VA Lenders

Lenders who offer lower credit scores many have overlays in exchange for accepting those lower credit scores.

What are overlays? Overlays are additional requirements imposed by lenders. Examples of overlays are lower DTI requirements, additional reserves, or even a down payment despite the fact that VA loans typically do not have one.

We do our best to partner with VA lenders who allow for lower credit scores without many overlays. Click to speak with a VA lender.

VA loan with a Bankruptcy or Foreclosure

Most VA lenders will require a two year seasoning after a bankruptcy or foreclosure before applying for a VA loan. However, exceptions can be made depending upon your circumstances so let us review your scenario to see if we have a lender who can help.


What is the lowest credit score for a VA loan?
There are no credit score minimums set by the VA but the lowest score being accepted in the industry right now is 500.

Why do veterans have poor credit?
Veterans are not much different than any other American when it comes to their credit situation. You will have people who have excellent credit and those who do not. The good news is there is help for veterans who have poor credit.

Will a co-borrower with good credit help to qualify for a VA loan?
You can add a co-borrower but the person must also live in the home. Lenders will also use the credit score for the borrower who has the lowest credit. So, adding a co-borrower will not help with credit.

Related Articles

VA Loan Requirements – See what the standard loan requirements are for a VA loan

Veterans United Pros and Cons – See our full review of this popular VA lender

VA vs Conventional Loans – If you have the funds for a down payment, you may want to see the differences between a VA loan and conventional loan

Bad Credit Lenders – There are lenders who offer mortgage programs for people with bad credit even if it is not a VA loan

Department of Veterans Affairs Benefits Department

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