As a veteran, purchasing a home is an honor. It can also be challenging as VA Loan requirements are different from conventional loans.
The VA Loan is an entitlement benefit helping veterans, reservists, and eligible surviving spouses become homeowners with zero down payment. It provides a government guarantee to protect lenders in the event of a veteran’s default. Additionally, it also requires mortgage insurance, which covers the event of a veteran’s death or permanent disability.
One important factor to consider is your credit score. Here are a few general tips that can help you improve your credit score to be eligible for a VA Loan.
The sooner you begin working on your credit score, the higher your score will be when you apply for a loan. The average credit score for most first-time homebuyers is 620. That is higher than the average credit score for someone the same age but who has never owned a home in the past. Start now to boost your score.
Take Advantage of Free Credit Reports & Monitoring
Checking your credit report periodically to ensure that the information is correct and up-to-date can be a good way to keep tabs on your credit. Many financial institutions offer free credit reports and credit monitoring so take advantage of them.
Pay Off Credit Balances Before the Statement Closing Date
One of the biggest factors in your credit score is the debt on your credit cards. One strategy to improve your score is to pay off your credit card balance in full as soon as possible each month. Do this religiously, even if you have a grace period. It is more important always to pay your credit cards by their due date than to avoid late fees.
Do Not Close Credit Card Accounts That You Are Still Using
Closing a credit account that you are still using can negatively affect your credit score. The account will continue to appear on your credit report for seven years since the last time you used it.
Stay Within Your Credit Limit
Having a large amount of credit available can harm your credit score. It is much better to keep available credit low. If you charge something, make sure you can pay it off in full before the statement closing date.
Having a good credit score can take time. It can take several years to improve your credit to the level of eligibility for a VA Loan. Even if you are eligible right now, it is best to keep working on your credit score for a few more months to ensure it is high enough to get the best possible interest rate.
Ready to Apply for a VA Loan?
Now that you have a better understanding of improving your credit score, you can take the steps necessary to make sure your credit score is in the best shape possible before you apply for a VA Loan. Remember that you want to work on your credit score several months before you apply so you can be sure that your score is high enough to get the best possible interest rate.
Do you need help with VA loans in Oklahoma and Florida? Cross Timbers Mortgage helps people find the right mortgage in Edmond aligned to their financial goals. Get in touch with us!