Do you need a minimum credit score for a VA loan?

A VA loan is a mortgage partially guaranteed by the U.S. Department of Veterans Affairs (VA).¹ Borrowers must be active service members, veterans, or eligible surviving spouses. If that’s you, you may wonder what credit score you need to qualify. Read on to learn more and pick the right home loan for your situation.

Who sets credit standards for VA loans?

The Department of Veterans Affairs doesn’t impose a fixed credit score requirement on borrowers. It only partially guarantees the loan, meaning it’ll compensate participating lenders if the borrower defaults.

Lender overlays for VA loans

That said, participating lenders may have their own stricter borrowing criteria. These are often called lender overlays. They help lenders mitigate risk, adjust underwriting to current market conditions, and comply with local lending regulations and practices.

Is there a minimum credit score for a VA loan?

While the VA itself doesn’t impose a credit requirement, most participating lenders do. Common minimum credit score thresholds include 580, 600, 620, or 640. VA loans from Rocket Mortgage require a score of at least 580, for instance. However, credit score requirements vary by lender and market. Prequalify for a VA loan with multiple lenders to compare loan terms and rates.

Can you get a VA loan with bad credit?

Credit scores aren’t necessarily “bad” or “good.” They sit on a spectrum that ranges from poor (<580) to exceptional (800+).

If your credit score isn’t sufficient to qualify, the first thing you should do is learn what your score is and what’s on your credit report. You can get a free credit report from any of the three credit bureaus once a year. From there, you can work to repair your credit.

If you notice an error or incorrect information on a particular report, you can file a dispute with the credit bureau. Even if you do qualify for a VA loan, it’s always a good idea to work on raising your credit score. This can help you qualify for a better interest rate on the loan.

Rocket Mortgage’s credit score requirements

Rocket Mortgage VA loan borrowers must have a credit score of at least 580.

Additional VA loan requirements

You’ll need to meet some additional requirements to obtain a VA loan. Let’s review some common borrower standards among VA lenders:

• Eligible military service (this typically includes veterans, active-duty service members, the National Guard, reservists, and qualifying spouses)
• Stable income and employment history
• A debt-to-income ratio (DTI) that meets lender standards
• A certificate of eligibility (COE) from the VA
• The financed property must be considered a primary residence.
• The property must meet the VA’s minimum property requirements (MPRs) for safety, structural integrity, and livability.
• A pest inspection may be required in some states.

VA home loan credit requirements at Rocket Mortgage

At Rocket Mortgage, we require a minimum FICO® Score of 580 for VA loans. When you apply for a VA loan, we’ll carefully review the property and your financial details to determine if you qualify. By the end of this underwriting process, we’ll offer you specific loan terms and an interest rate based on your financial profile.

Must pass the VA’s underwriting system

Most loans sent to the VA go through an automated government underwriting system. If you get approved by the algorithm without a human being involved, it’s termed “approve/eligible.”

If you qualify with a score of 580 – 619, you’ll have some strict limits in terms of how high your house payment and overall debt load can be.

Must have an acceptable housing expense ratio

The first thing we look at is your housing expense ratio, which is your mortgage payment – including taxes, insurance, and (if applicable) homeowners association (HOA) dues – divided by your gross monthly income and expressed as a percentage.

Mortgage Payment / Gross Monthly Income = Housing Expense Ratio

Your monthly mortgage payment cannot be more than 38% of your income before taxes if you’re qualifying with a credit score below 620.

Must have a DTI of 45% or less

Your DTI is a ratio comparing your monthly payments for installment debt, mortgage debt, and minimum payments on revolving debt like credit cards to your gross monthly income.

(Installment Debt + Revolving Debt + Mortgage Debt) / Gross Monthly Income = DTI

If your credit score is below 640 and your down payment is less than 5%, your overall DTI, including your mortgage payment and all other debts, must be no higher than 45%.

May be subject to manual underwriting

To qualify based on manual underwriting at Rocket Mortgage, you need a minimum median FICO^® Score of 640 or higher. Your DTI can also be no higher than 45%. If you’re refinancing, you have to leave at least 10% equity in the home.

Manual underwriting is often triggered by an automated underwriting designation called “refer/eligible.” This means the automated system can’t issue an approval, but the application is still potentially eligible with further human review.

A note about VA jumbo loans

While the VA doesn’t set loan limits, participating lenders might. Many adhere to conventional loan limits, turning VA loans that exceed these into VA jumbo loans (a VA loan that exceeds conventional loan limits).

With full VA entitlement, if you have a qualifying credit score of 640 or higher, you can purchase with no down payment (or refinance up to the full amount of your home’s appraised value) for loan amounts of $1.5 million or less. You can get a loan of up to $2 million with a 10% down payment or equity amount and a 680 median credit score.

Why are VA home loan credit score requirements less strict?

VA loans are government-backed mortgages. This means that those buying into a VA mortgage bond on the secondary market can be more comfortable because it comes with a government guarantee. In contrast, conforming loans made by federally backed mortgage institutions like Fannie Mae or Freddie Mac have their own strict standards for qualification, but investors in those bonds aren’t guaranteed a return.

When you get a VA home loan, you’re applying through a private lender to buy or refinance a home. That loan is then guaranteed by the VA if it meets their requirements, including that it must be the home buyer’s primary residence and they meet certain DTI standards.

Since VA lenders are more protected from mortgage default when funding this type of loan, they are more willing to approve borrowers with low credit scores. That's why there’s no official credit requirement, though individual lenders may set one. 

VA loan disqualifiers

Despite VA loans’ relatively loose borrowing requirements, there are still circumstances under which you could disqualify.

For example, borrowers who aren’t service members, veterans, or surviving spouses won’t qualify for a VA loan. Neither will those who can’t pay the VA’s one-time funding fee (up to 3.3% of the loan amount) nor those who don’t intend to live in the property.

In addition, even if you meet the VA’s standards, you may not qualify for a VA loan if you can’t meet the lender’s requirements. These can include a minimum income, credit score, and DTI.

The bottom line: The credit score needed for a VA loan can vary

While the VA itself doesn’t set a minimum credit score requirement, most lenders do — with thresholds typically ranging from 580 to 640. The good news is that VA loans remain one of the most accessible mortgage options for eligible borrowers, even those with less-than-perfect credit.

Whether you’re just starting to explore your options or you’re ready to take the next step, checking today’s VA loan rates can help you understand what’s available to you. Prequalify for a VA loan with Rocket Mortgage today!

¹Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

Rocket Mortgage is a trademark of Rocket Mortgage, LLC or its affiliates.