Can I Get a VA Loan With a Fair Credit Score

By Bethany Eanes

The U.S. Department of Veterans Affairs (VA) provides assistance for veterans and active duty service members in financing the purchase of a home through the VA loan program. Eligibility is based more on service than on financial capabilities.

Veterans and service members have historically had a difficult time securing mortgages because of a number of unique factors. For example, they may have low credit scores since they did not take loans while in the service. They may also have large gaps in financial information during they time they are abroad. The VA loan program helps overcome these credit problems by offering government security on private loans.

Service is the number one requirement for the VA home loan program. To determine if you are eligible, check with the VA's eligible periods of service (see Resources). Have your discharge papers or military ID handy when you are applying for a VA loan guarantee.

The VA generally overlooks credit problems, but it does check the past 12 months of your credit history, and you must be at least a year out of a Chapter 13 and two years out of Chapter 7 bankruptcy. If you do qualify, your credit score will not affect your loan rates. If you do not qualify, you may attempt to repair your credit and reapply.

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