VA Loan Articles
VA Loan Applications: Your Credit ReportWhen applying for a VA home loan, one of the most important parts of the process is your credit report. While it's true that the VA does not go by your credit score to determine eligibility, your credit report affects your VA loan application in other ways. The VA criteria for examining your credit report includes looking at credit history and patterns over the last 12 months, so it is crucial for you to begin preparing your credit early. Did you have a missed or late payment earlier in the year?
Do you have outstanding issues on your credit score that are still unresolved? You'll need to start the process of fixing those problems and get them resolved before it's safe for you to apply for a VA mortgage loan. That's why some experts recommend starting a year before you actually go house hunting--credit reports take time to dispute, correct or repair. If you find errors, identity theft or outdated information, you'll need to first dispute or complain about the incorrect data, then follow the credit reporting agency's procedures for sorting out the issue. That's strictly between you and the credit agency, the bank and the VA do not play a part.
Checking for oversights and omissions is a critical part of the credit reporting process. Don't order just one credit report from a single agency. You need to insure that any changes in your marital or family status are correctly reflected on your credit history. Are you claiming dependents on your taxes now? A recent change may not be fully updated yet. Any change in your current status that could affect your ability to pay (for better or worse) must be consistent from all sources. If the bank gets conflicting information from sources such as your application listing one marital status but your credit report listing another, it could hold up your loan application until the issue is sorted out.
You should also be aware of the differences between your own private credit report inquiries and those the bank will do as part of the VA loan application process. VA lending rules require the credit agency to deliver your credit report information directly to the lender, never by way of a third party including the borrower. In this sense, your credit report is a bit like your old college transcripts--the same way a new school must get transfer transcripts directly from another school, the bank must get your credit report directly from one of the three major credit reporting agencies.