It is a common misconception that individuals with weak credit may readily get VA home loans. These loans are available to post-active duty military personnel and their families; most military personnel will be eligible based on this condition. They’re also available with little to no money down and no need for private mortgage insurance. Even though these choices have made it simpler to obtain a VA loan, there are still minimum credit criteria. If you have negative credit, follow these guidelines to get a loan.
Send A Written Explanation
Even though you were legally compelled to pay the debt, you can mitigate its impact on your ability to get a VA home loan. You can include a written explanation with your credit report if you choose. The lender might be given the same rationale. There is a level of awareness among VA lenders about the issues that occur while a person is on active service. You may use this situation to explain why you haven’t paid your bills, and the lender could understand. To make this work in your favor, you’ll need to establish that there were extenuating circumstances.
Credit Disputes Should Be Filed
It is normal for military personnel to have a bad credit score as a result of debts not being paid while on active duty. If a collections firm takes over the process of collecting on an overdue utility bill, for example, it might become a bothersome credit concern. Although there may be nothing you can do, there are ways to dispute a bad report. To begin with, a lot of collection agents do not have the legal authority to collect.
If the agent is unable to validate the debt, you can have the debt dismissed in small claims court. Second, there is a statute of limitations for collecting a debt. If your debt was beyond this period when the lender reported you to the credit bureaus, you can dispute the report. Check laws in your state to see if your debts are past this limit.
Even if you have low credit, putting down a significant down payment on a home might help you get a VA loan. Regardless of your credit, the VA will issue your guarantee since you are eligible only because of your service background. You will, however, need to qualify for a private loan, which might be difficult if you have a poor credit score. By making a high down payment, you are assuming additional loan risk. The lender can lessen the risk of writing your mortgage by using both your down payment and the VA guarantee. Even if you have low credit, you should be able to acquire a house loan with a 50% down payment and a VA guarantee.