If you can't get a VA Mortgage through your local bank, this is the most typical, logical path for a prospective homeowner to get a bad credit VA mortgage loan. VA loans are offered through lenders approved by the VA. You can likely get approved for an VA loan with a bad credit score as low as 560, provided you have some compensating factors. Example 1. Rental History 2. Low debt-to-income ratios 3. Reserves/Assets.
Generally, the loan only assesses the previous twelve months of a candidate’s pay history. However, depending on the type of VA loan and purpose, each investor may have their own credit score overlay. This overlay may use set guidelines but can be accepted on a case by case basis. This will also vary by state and each borrower’s individual circumstances. If you have an even lower credit score, that doesn't mean you're out on the street. According to VA's website, your credit score can be as low as 500. Poor credit scores will not be the sole reason the applicant is rejected for financing.