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Can I get a loan with a 600 beacon score?

I have plenty of cash ($30k) on hand and stocks, 401k, ($80k) etc.  We have no debt other than 1 student loan and I have access to a VA loan...can I still be approved?
  • July 19 2009 - Southlake
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Answers (8)

Yes, it is possible to get a VA loan with a middle range FICO score between 600-619. I even work with a lender that goes as low as 580, but other factors are considered. If you have re-established credit and payment history in the last 12 months, it will help your chances with a score below 620. 
  • May 05 2014
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Profile picture for Mister Info
It's possible as mentioned by other members in this post but depends on a whole lot of variables so I'll repeat my comments from a previous post. At the end of the day I recommend cleaning up your credit before applying for a bad credit mortgage loan. So many people make the mistake of dedicating so much time and energy into finding someone that will approve a loan for their current bad credit situation instead of using the same time, energy to simply raising their scores. It's easier than you think when using a reputable credit repair agency. My sister worked with a great company [self-promotional post, removed by moderator] who helped raise her score from the low 5's to the upper 6's within 4-5 months.

The expense required to clean up your scores is usually $500 - $800  while the expense of a bad credit loan interest rates will cost you 10's of THOUSANDS of dollars. You do the math.
  • August 02 2009
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your beacon score is 600 but how about the other two?  lenders look at all three and go by the middle score.  If your low score is 600 then you are good to go because your middle is necessarily higher.  If your high score is 600 then you are sunk.  We do va, fha, and rural loans all with 600 middle score.
  • July 21 2009
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Yes...for a VA loan....
  • July 21 2009
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Yes.
  • July 19 2009
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Danny,

Although it is more difficult it is not impossible.  Most lenders and bankers choose not to fund loans for individuals with middle credit scores below 620.  This is not an FHA or VA guideline but it is the lenders choice not do to these loans.  I work with a banker who will do loans for individuals with a credit score of 600-619.  So if your middle credit score is a 600 then you would have a chance of getting a loan today.  The fact that you have a good amount of cash on hand and assets is also a plus but the end result would still come down to your credit profile and what is making your scores lower than ideal.  

I have two FHA purchases closing this month with borrowers having 613 and 607 credit scores respectively.  The good news is that the rate is not even that much higher.  The average FHA/VA 30 year rate today is between 5%-5.25%.  If your middle credit score was a 600 then you would get a rate of about 5.875%.  Not a bad rate by any means these days but higher than the best rates available.  If you qualify you could buy a home today, take advantage of the tax credit and do a streamline refinance in the future once your scores improve.

I am only licensed to lend in Texas and I am not sure where you are located so I would check with some of your local lenders and see if they have a similar program for somebody like yourself.  You may be able to take advantage of today's low interest rate environment after all.

I wish you the best of luck.
  • July 19 2009
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Profile picture for SunTrust
Not all lenders tier price VA loans, though it appears that more and more are. The hit isn't catastrophic.

For example: our lowest tier starts at a 600 score: the hit is to discount points but the end result is a rate that is about 0.25% above what someone with a 680 score would get.

Assuming good debt to income ratio and with residuals in line, I wouldn't discourage you from applying for a VA loan.
  • July 19 2009
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Danny,

The main problem that a 600 score represents is that the borrower does not repay the loan basically. You may posses assets and have a job, but something has not worked properly to reflect a good pay history.  I am unsure about VA and score requirements, but I would urge you to be more patient and get any and all lingering/outstanding collections paid in full and wait 6 months and pay the existing bills well to proved 2 things:

1) You can pay your bills on time
2) Your score will rise and you will get a much better rate

Why get hammered on a home loan for previous sins?  makes no financial sense.  I wish you well.
  • July 19 2009
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