You’ve got a mortgage and you want to refinance with a VA loan, only your credit has deteriorated since you qualified for your last mortgage.  You may still qualify.

There is no minimum credit score established by the VA to qualify for their federal mortgage guarantee.  According to VA guidelines, lenders are given flexibility to decide whether a VA-eligible borrower qualifies for a loan or not.  The VA recommends that lenders consider a combination of qualifying requirements when approving VA mortgages.  In addition to credit history and FICO scores, VA-approved lenders take into consideration an applicant’s debt-to-income ratios, residual incomes and loan histories before approving or declining anyone for a VA loan. 

That said, most VA-approved lenders will likely set their own credit score minimums, which are often slightly lower than those required for a conventional mortgage.  If a borrower’s credit has worsened since his or her original loan, then it just depends on how bad it is.  If it is lower than the VA-approved lender allows then it is possible for the applicant to be declined based on credit alone even if he or she has everything else in place. 

A low credit score isn’t the end of the world.  If your credit score alone is preventing you from getting a VA loan, ask your lender for a copy of your credit report.  See which credit delinquencies have hurt your score and take a little time to make good on those bad debts.  A credit score can rise almost as quickly as it falls.