Can You Get a VA Loan with Bad Credit in 2025?
We’ve helped borrowers get approved with scores as low as 580, and we offer manual underwriting for those who need a closer look. No call centers here—just real conversations with VA loan specialists who understand your benefits and your situation.
If your credit’s not perfect, that’s okay. Let’s talk about how the VA loan can still work for you.
Key Takeaways
- VA Loans Are Still Possible With Bad Credit: Many lenders accept scores as low as 580, especially when paired with steady income or low DTI.
- Manual Underwriting Is Key: If your credit is below 620, manual review may help you qualify based on overall financial strength—not just your score.
- Compensating Factors Matter: A long employment history, cash reserves, on-time rent, and low debt all improve approval odds.
- VA Has No Minimum Score Requirement: Lenders set credit score limits, but the VA itself does not have a hard cutoff.
- You Can Rebuild After Bankruptcy or Foreclosure: VA loans are available after waiting periods (2 years for most events) with documented recovery.
- Alternative Credit Can Be Used: Rent payments, utility bills, and insurance history can help establish a positive credit profile.
- Shop Lenders With Bad Credit Expertise: Not all lenders offer manual underwriting—look for VA specialists who evaluate the full picture.
- FHA Can Be a Bridge Option: If VA approval isn’t yet possible, start with FHA and refinance into VA later to eliminate PMI and reduce payments.
See if You Qualify for a VA Loan
Your credit history plays a significant role in determining whether you qualify for a VA loan. Many veterans and active-duty service members are unsure if their credit score meets the requirements set by VA-approved lenders.
Our VA Loan Eligibility Calculator is designed to give you a clear picture of where you stand and what steps you may need to take to qualify.
How Your Credit History Impacts VA Loan Approval
While the Department of Veterans Affairs doesn’t set a minimum credit score, most lenders require a score of 620 or higher for automated approval. Lenders in our network can approve VA loans with scores as low as 580 in some cases.
Lower scores may still qualify, but they often require manual underwriting and additional compensating factors such as:
- Stable employment or steady income
- Low debt-to-income ratio (DTI)
- Significant cash reserves or savings
VA Loan Eligibility Calculator
In this Article
How to Qualify for a VA Loan with Bad Credit in 2025
If you’re a Veteran dealing with bad credit, you might feel like homeownership is out of reach. Maybe you’ve been turned down before. Maybe you’re tired of talking to call center reps who don’t understand the VA loan—or your story. That ends here.
The truth is, you can qualify for a VA loan even with a 580 credit score. And when automated systems fall short, we use manual underwriting to take a deeper look at your income, service, and financial picture.
Here’s how Veterans with less-than-perfect credit can still move forward:
- Work with a Specialized Lender: Not all lenders are built the same. Many turn away Veterans under 620. But some, like us, specialize in VA loans for bad-credit borrowers, and routinely approve scores as low as 580.
- Show Compensating Factors: If your credit is shaky, other strengths—like steady income, low DTI, or cash reserves—can tip the scales. The VA’s automated underwriting system (AUS) weighs all of these when deciding if your loan can move forward.
- Improve Your Credit Profile: Even small tweaks can go a long way. Paying down credit cards, using a rapid rescore, and following a focused credit plan for VA loans can boost your score by 30 to 80 points in just weeks.
“Lenders look at the full picture, not just your score. If you’ve got stable income and a manageable debt load, you’ve got a strong case,” says Sarah Miller, a VA loan expert who’s worked with thousands of Veterans.
Steps to Take Before Applying for a VA Loan
- Check Your Real Mortgage Scores: Free apps like Credit Karma won’t cut it. Get your mortgage-specific FICO 2/4/5 scores to see what lenders will actually use. This guide compares mortgage credit vs. Credit Karma.
- Lower Your Credit Card Balances: Aim for under 30% utilization. Then request a rescore to update your file faster.
- Hold Off on New Inquiries: One hard pull can drop borderline scores and affect VA loan credit score minimums.
- Organize Financial Documents: Include all income, especially tax-free sources. We can gross up VA disability and BAH to increase your qualifying income.
- Choose the Right Lender: Don’t let one “no” stop you. Some lenders offer manual underwriting and more flexible approvals for Veterans.
How Much Can You Borrow with a VA Loan if You Have Bad Credit?
Your credit score doesn’t directly cap your VA loan amount—but it can affect how comfortable a lender feels with a higher loan. With full entitlement, there’s technically no VA loan limit (subject to lender approval). With partial entitlement, county limits apply.
| Loan Entitlement | Maximum Loan Amount |
|---|---|
| Full entitlement | No VA loan limit |
| Partial entitlement | County-specific limits apply |
Even with lower scores, strong AUS approval or added cash reserves can unlock higher loan amounts. Review how credit scores impact VA loan rates to help you decide whether to wait or move forward now.
Tips for Improving Your Approval Odds
Credit score is just one piece of the puzzle. Here’s how Veterans can strengthen their application:
- Put Down 5% or More: It’s not required—but adding a small down payment plus two months of cash reserves can flip a denial into an approval.
- Show On-Time Rent: Document a year’s worth of rent payments, especially if they were made via military allotment or BAH.
- Add a Co-Borrower (Temporarily): You can use a relative as an FHA co-borrower now and refinance to VA later.
“A lot of Veterans assume they’ll be denied based on credit. But we’ve approved many borrowers who thought they had no shot,” says Lisa Parker, a VA lending expert.
Common Compensating Factors That Strengthen Your Case
If your score is low, these factors can help:
- Higher Income: The more monthly cushion you have, the better. Use our income checklist to calculate.
- Steady Employment: Two years in your job or military service shows reliability.
- Solid Savings: Use our DTI calculator to show you’ve got enough left over each month after bills.
| Compensating Factor | Why It Helps |
|---|---|
| 2+ years in job or MOS | Demonstrates long-term stability |
| Emergency fund/cash reserves | Makes the lender more confident in your ability to repay |
| Low debt-to-income ratio | Shows strong money management even with lower credit |
How Your Loan Officer and the AUS Algorithm Work Together
Every file starts with automated underwriting. But if your result is “Refer” or “Refer with Caution,” that’s where experience counts. A seasoned VA loan officer can rerun your file after adjustments—or take it straight into manual underwriting, where real humans weigh your file beyond just a score.
Not every lender is willing to do that. We are.
What If AUS Doesn’t Approve You?
Manual underwriting gives your story a second chance. If you’ve had late payments, collections, or recent setbacks, this path allows underwriters to review:
12 months of rent history
Job stability
Resolved collections (or active pay plans)
Steps you’ve taken to rebuild
Use our guides to clean up past debts with a settled charge-off or pay-for-delete negotiation.
Key Factors Under Manual Review
- Steady income and employment
- Low DTI ratio
- Documented savings
- On-time rent or utility payments
Can’t Qualify Yet? Consider FHA as a Temporary Bridge
If your file can’t clear VA underwriting now, FHA might work short-term while you rebuild:
Requires 3.5% down
Has monthly mortgage insurance (which VA doesn’t)
Can refinance into a VA loan later to remove PMI
Explore FHA-to-VA paths if you’re stuck now but planning to bounce back.
Obtaining a VA Loan After Bankruptcy or Foreclosure
VA Loan After Bankruptcy:
- Chapter 7 Bankruptcy: Standard waiting period is 2 years from discharge; spend this time rebuilding credit.
- Chapter 13 Bankruptcy: Possible while still in repayment—after 12 on‑time payments and trustee approval.
VA Loan After Foreclosure:
- Waiting Period: Typically 2 years from foreclosure date; focus on score, savings, and stable income.
- Demonstrating Improvement: Show reduced debt and seasoned on‑time payments.
| Bankruptcy/Foreclosure | Waiting Period | Required Actions |
|---|---|---|
| Chapter 7 Bankruptcy | 2 years | Rebuild credit, demonstrate financial stability |
| Chapter 13 Bankruptcy | 12 months (with court approval) | Timely payments, trustee approval |
| Foreclosure | 2 years | Improve credit, stabilize income |
The Bottom Line
Bad credit doesn’t bar you from homeownership. Boost scores where possible, document compensating factors, and work with lenders skilled in both AUS and manual reviews. If timing or overlays still block approval, consider FHA as an interim step before refinancing into the unrivaled benefits of a VA mortgage.
For more information:
- U.S. Department of Veterans Affairs – VA Home Loan Benefits
- Consumer Financial Protection Bureau – Tips for Improving Your Credit Score
Frequently Asked Questions About Getting a VA Loan With Bad Credit
Can I get a VA loan with bad credit?
Yes. Many lenders approve VA loans with scores as low as 580 when you have strong income, low debt, or substantial residual income.
What is the lowest credit score accepted for a VA loan?
Most lenders require 580–620, but specialized programs exist down to 500 when compensating factors are strong.
Does the VA guarantee help with poor credit?
Yes—the guarantee reduces lender risk, allowing more flexible credit approvals than conventional loans.
What if I have collections or charge‑offs?
You can still qualify if balances are resolved or in a documented payment plan.
Do late payments disqualify me from a VA loan?
Not automatically; isolated or older lates are less problematic than recent, repeated delinquencies.
Will a bankruptcy or foreclosure stop me from getting a VA loan?
No—see the waiting‑period guidelines above.
Can I qualify with no credit history?
Yes. Lenders can use alternative credit such as rent, utilities, and phone bills.
What are compensating factors for low‑credit VA borrowers?
High residual income, significant savings, and long employment histories weigh heavily in your favor.
How can I improve my VA loan approval chances with bad credit?
Lower revolving balances, request a rapid rescore, and document every stable income source.
Do all VA lenders allow bad‑credit approvals?
No. If denied, approach a lender advertising manual underwriting or dedicated bad‑credit VA expertise.
Explore More VA Loan Credit & Qualification Guides
- Manual Underwriting for VA Loans
- Understanding the VA Automated Underwriting System
- Minimum Credit Score Needed for VA Loans
- Can You Get a VA Home Loan with a 580 Credit Score?
- How Your Credit Score Impacts VA Loan Rates
- Mortgage Credit Scores vs. Credit Karma: What Lenders Really See
- How to Improve Your Credit Before Applying for a VA Loan
- Using Rapid Rescores to Qualify for a VA Mortgage
- Settling Charged-Off Credit Cards for VA Loan Approval
- How to Negotiate Pay-for-Delete with Collection Agencies
- Grossing Up VA Disability or Tax-Free Income
- Using Military Pay to Qualify for a VA Loan
- What Counts as Qualifying Income for a VA Loan?
- How to Calculate Your DTI Ratio for VA Loan Approval
- Do You Need Cash Reserves for a VA Loan?
- Refinancing an FHA Loan to a VA Loan
- FHA Loan Alternatives for Veterans Who Don’t Qualify
- Using a Non-Occupying Co-Borrower on an FHA Loan
Related Posts
VA Manual Underwriting: Your Path to Homeownership for Veterans 
How to Get a VA Loan with Bad Credit 
Mortgage Credit Scores vs. Credit Karma 
Can You Get a VA Loan with a 580 Credit Score? 
VA Loan Denied Due to Credit Issues – How to Rebound and Qualify 
VA Rapid Rescore: Boost Your Credit for Faster Mortgage Approval