Your credit is an important part of any mortgage application. But if you’re eyeing a VA loan — a mortgage reserved for military members, veterans and select others — then your credit requirements are going to look a little different than they would for other types of loans.

How exactly do lenders assess your credit risk, and what should your credit look like if you want to be approved for a VA loan? Here’s what you need to know.

What’s a VA home loan?

A VA loan is a mortgage that’s guaranteed by the U.S. Department of Veterans Affairs but issued by a private mortgage lender. This simply means the VA assumes some of the risk and will repay lenders a portion of the loan if a borrower fails to make their payments.

Only active-duty military members, veterans and members of the National Guard and Reserve who meet certain military service requirements are eligible for VA loans. In some cases, surviving spouses can use them, too.

For those eligible, VA loans can be a game-changer. They require no down payment, have some of the lowest interest rates around, and come with no loan limits, either. They also don’t require mortgage insurance, unlike many other loan options.

Credit requirements for a VA home loan

As part of the government’s guarantee of VA loans, it also sets the minimum requirements. These include the military service requirements mentioned above, as well as property safety standards, fees and more. When it comes to credit scores, however, the VA is very flexible and requires no specific minimum.

Carla Blair-Gamblian, credit consultant team lead at Veterans United Home Loans, says that while the VA does not establish a universal minimum credit score requirement, "Lenders still have to evaluate overall credit risk and ability to repay."

As a result of having no set minimum, you may find a range of requirements, depending on the lender's criteria for establishing creditworthiness.

Generally speaking, most VA lenders require a minimum credit score of 620, though some allow scores as low as 550. The type and amount of the VA loan you’re applying for matter, too. For example, Veterans United has a 620 minimum for most VA loans, but for those with balances above $2 million, the requirement jumps to 680.

Lenders will also usually evaluate borrowers based on other credit elements as well — things like how long you’ve been using credit, any bankruptcies or foreclosures on your record, your bill payment history and any recently opened accounts or credit lines. As Blair-Gamblian puts it, “A credit score is only one piece of the picture.”

Destinee Stice, vice president of loan origination at NewDay USA, says that borrowers with less-than-perfect credit scores or a poor credit history may still be able to qualify for a VA loan, but will need to find the right lender.

"It's really important to have a lender that has an in-person underwriting team right there to look at the entire picture," she says.

The underwriters can review your entire credit history to determine whether the negative issues affecting your score were a one-time event that has been resolved, or if further improvement is needed before you are financially able to assume a mortgage.

5 ways to improve your credit for a VA home loan

Sprucing up your credit is important before any loan application, but it’s particularly important before applying for a mortgage. If your credit score is low or you’re worried about qualifying for a VA loan, use these tips to improve your chances:

1. Pay all your bills on time.

If a VA loan application is in your future, then paying your bills on time is rule No. 1, lenders say. Paying all your bills in a timely and consistent manner builds trust among lenders, reduces your credit risk and allows you to qualify for a lower interest rate and higher credit limit.

"We're going to be looking at your ability to repay over time," Stice says. "If you have those on-time payments, fantastic."

Open all your bills promptly, schedule payments well ahead of their due dates, and set up autopay where possible. Then, check that the payment went through. A history of on-time payments not only protects your credit score but also prevents you from incurring late fees and penalties that can eventually lead to higher interest rates.

If you have a history of missed payments in your credit report, Stice says that working with your lender can help you identify ways to improve your score and eventually qualify for a loan.

2. Settle any past-due accounts ASAP.

If a payment slips through the cracks, get your account current as soon as you can. Late payments show that you can’t handle debt responsibly and make you riskier to lenders. That can make it harder to get approved for a loan or increase your costs if you do get approved.

“If a borrower wants to improve their chances of getting a VA loan, the first priority is stability,” Blair-Gamblian says. “Get any open past-due accounts resolved as quickly as possible. Mortgage lenders pay very close attention to whether a borrower has accounts that are currently delinquent.”

3. Reduce your debts.

If you have large credit card balances or other loans to your name, paying those down can help improve your credit score and, in many cases, your chances of getting a mortgage, too.

Any reduction can help, but ideally, to achieve the best credit score, FICO recommends keeping your balances at 10% or less of your total available credit line. So, if you have a $30,000 credit card limit, keeping your balance below $3,000 would be best.

There are several ways to reduce your debt. Your first step is to list all your loans and credit cards, including the interest rate paid and minimum payments due. Prioritize what you owe, either from the lowest balance or interest rate to the highest, or vice versa.

Once you have your list, target one debt at a time. Many experts recommend using the avalanche method, in which you pay down the loan or credit card with the highest interest rate first. However, some borrowers are more comfortable tackling the lowest balance debt first. The important part is establishing a payment plan that works with your budget and sticking to it.

4. Avoid big changes.

During this time, keeping your credit as steady as possible and showing a consistent pattern of responsible financial behavior is the safest approach, Blair-Gamblian says.

Missing payments or paying a bill late aren’t the only things that can hurt your credit and mortgage chances. Racking up balances on your credit card or credit line can also impact your score and how lenders view you as a borrower. Applying for new forms of credit, whether a new card or loan, in the months leading up to your application can affect your creditworthiness, too.

"It is important to go into a new debt and into a new property as limited on current debt as possible," Stice says. By increasing your debt levels, you will reduce your purchasing power and increase your monthly payment burden.

5. Commit to the change.

With credit, there’s often no quick fix, Blair-Gamblian says, so “Give yourself enough time to show improvement.”

How long it takes to improve your score depends on the action you need to take. You may see small improvements in your score within 30 to 90 days if you reduce your credit balances, for example.

However, if you have several months of missed payments or other negative information on your credit report, it could take one to two years to significantly raise your score. In contrast, severe issues such as foreclosure and bankruptcy can take several years to erase.

A credit counselor may also be able to help. Or, if you’re having trouble paying your bills and managing your finances regularly, a financial advisor or budgeting professional may be better. Ensuring your finances are in order first improves your chances of qualifying for a loan.

While several strategies can help you improve your score and improve your overall credit outlook, lenders want to see a picture of stability over the long haul — so be patient, and commit to good credit habits for the foreseeable future. It can sometimes take a while to see the fruits of your labor.

Talk to a lender for help

VA loans offer a lot of flexibility in the credit department, so if you’re worried about qualifying for one, talk to a loan officer at a mortgage company. They may have tips to help you improve your application, or they could have alternative solutions to get you the financing you need.

Not all companies are equal when it comes to increasing your chance of approval, however. Working with a lender who also offers credit counseling services can be invaluable in helping borrowers understand their credit profile, identify areas for improvement, and, if necessary, establish a plan to bring their score up to qualify for a VA loan.

To date, for example, Veterans United has helped more than 345,000 100,000 borrowers improve their scores; 56% of those applying for a loan had a score between 500 and 579 and were able to raise it above 620. Over 100,000 of these applicants went on to qualify for a loan through the lender.

“Veterans who come to us with credit challenges aren’t simply shown the door,” Blair-Gamblian says. “Would-be buyers without qualifying credit have the opportunity to work with our team of credit experts, who help them develop a personalized plan to improve their credit and strengthen their overall financial picture.”