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By Linda Cameron

If your credit score is in the upper range, you’re an excellent candidate for home loan approval. But in a persistently soaring real estate market, what is the ideal credit range for VA loan applicants? Acceptable credit scores vary among lending institutions, including approved VA lenders.

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Only a year ago, a 620 FICO score was acceptable. Last year, Veterans United Network reported, “—as of April 2016, the national average FICO score was 699. Keeping that in mind, a 620 minimum is fairly borrower-friendly. It’s not necessarily an easy score to obtain, but it’s definitely an accommodating benchmark when measured against other loan options.”

Today, a credit score in the 650 – 660 range might not be ideal, particularly in a housing market still recalling the subprime lending that led to its collapse. Fortunately for veterans, credit scores don’t have to be above the clouds when applying for a VA mortgage. So the question for veterans might be, “What should my credit score be in order to qualify for a VA loan?” While the answer is not rock solid (e.g. “Your credit score should/must be —.”), it’s best to first get your FICO and credit reports from an approved rating agency before going through the pre-approval or pre-qualification process for a VA loan.

How to Get Your Credit Rating

You can access your credit report through Experian, TransUnion and FICO.

  • Experian and TransUnion: These credit bureaus maintain credit reports on consumers. Every 12 months, you can get a free credit report from each bureau through annualcreditreport.com. Also, some lenders allow consumers to access the free annual credit report directly from their site.
  • FICO: For a fee, you can get your credit report directly from the company that compiles credit score data for lenders, consumers, and credit bureaus Experian and TransUnion. FICO recommends that prospective home loan borrowers review FICO scores and reports from Experian and TransUnion before applying for a mortgage.

While there are consumer credit sites that also give credit scores and/or credit reports, their results may differ from what a lending institution has on file. If unable to get a direct answer about your actual credit score, you can contact Experian, TransUnion and FICO directly.

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Credit Score Ranges

According to a report in Credit Sesame, the credit score range is from 550 or less (poor) to 750 and above (excellent) for a home loan. Other sources set the credit score range from 385 to 850, with 385 considered acceptable for some VA and FHA lenders.

What If Your Credit Score isn’t That Great?

If lenders reject your application because your credit score is on the low side, try applying for a VA loan through a credit union. There are instances when bankruptcy and prior foreclosure might be accepted, based on group classification or secondary approval. But bad credit can lead to unwanted predatory lending schemes. Even if the terms are legal, remember there are legal loopholes. The best thing to do is repair your credit and correct inaccuracies in your credit report. If uncertain about where to begin, contact a VA loan consultant through the U.S. Department of Veterans Affairs. Don’t let a poor credit score or lack of credit history prevent your qualifying for a VA home loan. Just don’t fall into a shady lending trap.

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Along with research, there’s a lot of reading to do. But more knowledge yields a more rewarding loan experience when ready to buy or refinance.