When we're talking about VA home loans and credit scores, it's usually a conversation focused on what kind of scores lenders are looking for and what veterans can do to get theirs in great shape. Or maybe we're looking more into the factors that make up your credit score, from amounts owed and payment history to the types of credit you use.
But here's something that often gets glossed over, if it's even covered at all: What doesn't get factored into your credit score.
A credit score is a tool that lenders use to help evaluate your willingness and ability to repay debt. Right now, VA lenders are generally looking for at least a 620 score, although that benchmark can change depending on your personal situation, what type of loan you're seeking and which lender you're working with. There are five elements that comprise your score, three of which we mention above. The other two are your length of credit history and forms of new credit.
We explore these five factors in much greater detail and discuss ways to improve your score in our exhaustive Guide to Credit Scores. But it's also important for prospective VA borrowers to know that some demographic and financial information isn't part of the credit score calculation.
Here's a look at some of the big things that aren't included in your credit score:
So now you've got an idea of what isn't included in your credit score. Now is a great time to see what's actually in your credit report, and maybe even consider paying to see your score or having a lender pull your credit. You can get a free copy of your credit report (without having to give your credit card number or pay for monitoring or anything like that) at Annual Credit Report.com. You can head to the FICO website and pay $20 to get your score.
Remember, though, that the score you pay to see as a consumer can and likely will be different from what a lender sees. They get scores that come from a formula weighted more toward mortgage-related factors. So FICO may show you a 700 score, but a VA lender might only see a 620.
You can talk with a Veterans United loan specialist about loan prequalification and having your credit pulled at 855-870-8845.