VA Home Loan Credit Score 550 in Houston, Tx - The Ultimate Guide

How to Get a VA Home Loan with Bad Credit in Houston? Read on to see how veterans with bad credit might acquire a house loan.

Is it possible to get a VA home loan with bad credit? Many candidates want to know if and under what conditions they may acquire a VA Home Loan with Bad Credit in Houston. There are a few things you should know about VA home loans before you submit your application.

The VA does not establish or control FICO score standards. Before applying for a house loan, borrowers with bad credit should review their FICO ratings and credit histories. To offer the best costs and conditions, participating lenders may require FICO scores in the mid-600s.

In theory, the VA program does not offer any opportunities for home loans with bad credit. That is not to say that if you have less-than-perfect credit, you will be immediately denied a mortgage; rather, depending on the nature of your credit history, you may be able to qualify for a mortgage with a little extra work.

To begin with, everyone's definition of "bad credit" is different, but borrowers with FICO scores under 600, those who do not have a solid 12 months of on-time payments on all financial obligations at the time of application, and those who have a foreclosure or bankruptcy on their records that has not been fully discharged will have a difficult time justifying the best terms.

What Can You Do to Raise Your Credit Score?

Borrowers with poor credit should avoid paying for third-party "credit repair" services. By performing a few things on your own, you can improve your credit score for free. What are these things, exactly? Make on-time payments on ALL financial obligations for a minimum of 12 months. If you're worried about your ability to receive a home loan because of credit issues, don't apply for one until you have this 12-month payment history. Your credit rating will increase as a result of your on-time payment history, but it will take time.

When it comes to getting a house loan, your debt ratio is just as important as your credit score. If your monthly financial obligations take more than 40% of your income, you should endeavor to minimize that percentage before applying for a new home loan, VA or not. Lowering your debt ratio might help you improve your FICO scores.

If your credit card balances are more than 50% of your credit limit, you should endeavor to lower them as quickly as possible on all cards. This boosts your credit score while lowering your debt-to-income ratio.

If you find a VA lender willing to work with you and your situation, make sure to ask about the FICO score ranges allowed for the loan you want, any compensating factors that may be required if your credit scores demand them, and what you can do in the meantime to get a better rate and terms from that lender based on specific credit requirements and financial qualifications.

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