Why Your myFICO Score Differs From What Your VA Lender Sees
Cynthia is a veteran, and she did what a lot of careful buyers do. Before talking to a lender, she checked her credit through her myFICO account and felt good about the number. Then her lender pulled credit and came back with a lower one. Her spouse's score, meanwhile, was far lower than hers. Cynthia is a fictional example, but her situation comes up often, and it makes people think their VA loan plans are finished. They are usually not.
Why the scores do not match
The first thing to know is that nothing was wrong with Cynthia's credit report or her lender. Mortgage lenders generally rely on older versions of the FICO scoring model than the ones you see in most consumer apps. They also pull reports from all three bureaus, Equifax, Experian and TransUnion, rather than just one. Each bureau can hold slightly different information, so each produces a slightly different score.
Then the lender takes the middle score, not the highest and not the average of your best day. If you have three scores, the one in the middle is the one that counts for you. So an app score, even one labeled as a mortgage score, can differ from the lender's number because of the model version, the timing of when reports updated, and which bureaus were used.
What VA does and does not say about credit
VA does not set a minimum credit score for its home loan program. That surprises people. But lenders who make VA loans set their own minimum score requirements, and those can differ from one lender to the next. So the practical question is not whether VA has a cutoff. It is what the lender behind your loan needs to see.
What if one spouse's score is much lower?
This is where families get discouraged. When two people apply together, lenders often use the lower of the two middle scores to evaluate the loan. If your spouse's score is far below yours, that can pull down the whole application.
The good news is that you may have options. VA does not require a non-veteran spouse to be on the loan. So Cynthia looked at two paths.
Path one: apply together. This lets both incomes count, but the lower score is part of the picture.
Path two: apply as the veteran alone. This can work if her income and residual income qualify without her spouse's income. Residual income is the money VA expects a household to have left after major obligations and living costs, and it is part of how VA loans are evaluated.
One caution: in community property states, a non-borrowing spouse's debts may still be counted. If you live in one, ask how that applies to you before assuming the solo route works.
What the spouse can do in the meantime
While the paths are being compared, the spouse with the lower score can start improving it. The steps are simple and not glamorous:
Pay down credit card balances. High balances relative to limits are a common drag on scores.
Pull each bureau's report and dispute errors. A wrong account on just one bureau can change which score ends up in the middle.
Avoid opening new accounts or taking on new debt before the loan closes.
What you can do today
Look at all three of your credit reports, not just a single app score, and check them for mistakes. Then have a lender walk you through both structures, together and solo, so you can see which one fits your household instead of guessing.
That is the heart of how I work. A lower score is rarely the end of the road. It is usually a reason to compare options. I am licensed in South Carolina and several other states, and I help military families sort this out.
If Cynthia's story sounds like yours, call me at 843-LOW-RATE. I am Jason Sharon with Home Loans Inc, and I find the path.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.
