VA and FHA Loans with Low Credit Scores vs. Bad Credit. What’s the Difference?

Calculating home buying potential

There is a big difference!  We can close VA and FHA loans with low credit down to 500 credit scores.  Just because you have 500 credit score doesn’t mean you have “Bad Credit”.

So what’s the difference?

Low credit is generally considered anything below a 620 score.  Just because your scores are between 500-619 doesn’t mean you have “Bad Credit” it just means you may have had credit hiccups or late payments in the past that are keeping your credit scores low.

As long as you have had no late payments reporting to credit in the past 12 months your low credit score can still get you approved for a VA or FHA loan.


Bad Credit doesn’t always mean a low credit score.  You can still have 620+ credit score and have “Bad Credit”.   Bad credit is generally considered any late payments reporting on your credit in the most recent 12 months.  But just because you may have had a couple late payments in the most recent 12 months on your credit report, you can still be approved for a home loan.  Why do most lenders want a 620+ score even with “Bad Credit” because you can receive an “Automated” approval that states, past credit derogatory accounts are acceptable.


Depending on your Low Credit or Bad Credit you may still be eligible for a home.  Credit is more than just a score and just because you are labeled “Fair” or “Very Poor” doesn’t mean you cannot buy, refinance or cash-out refinance a home.  You need to work with a mortgage company that follows the investor guidelines and doesn’t have credit score overlays.


Contact Us

Access Capital Group Inc.
202 E. Earll Drive
Suite 460
Phoenix, AZ 85012

Phone: 6026485860


NMLS Consumer Access
NMLS # 33043

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