Complete Analysis: What Is The Minimum Credit Score For A VA Cash-Out?

The prospect of refinancing your home to access its equity is an appealing one, especially if you’re looking to consolidate debt, renovate, or pay off unexpected expenses. Among the many refinancing options available, the VA Cash-Out refinance program stands out for its veteran-focused benefits. If you’re a veteran or active-duty military member, this could be a golden opportunity for you. But what’s the catch? One of the primary concerns most people have is about the credit score requirement. 

In this article, we’ll delve deep into understanding the minimum credit score needed for a VA Cash-Out refinance.

1. The Basics Of The VA Cash-Out Refinance Program

The VA Cash-Out Refinance program is designed for veterans and active-duty military members. It allows you to tap into the equity of your home and use the funds for various purposes, be it home improvements, paying off debts, or personal expenses. Unlike other refinance programs, the VA Cash-Out comes with the backing of the Department of Veterans Affairs, which means a lot in terms of its credibility and advantages.

But like any financial product, there are certain requirements to qualify. While there’s no universally set minimum credit score for the VA Cash-Out refinance, most lenders have their own threshold. It’s worth noting that when you’re on the hunt for lenders, especially those specializing in VA loans, searching for a trusted name is crucial. For example, there are many helpful resources to look for at 1st United Mortgage, offering you insights into credit score requirements and more.

2. The Typical Minimum Credit Score

While the VA doesn’t set a specific minimum credit score, many lenders usually look for a score of 620 or higher. This seems to be the magic number in the mortgage industry. However, it’s essential to understand that this is not set in stone. Depending on the lender, their policies, and the overall risk they’re willing to undertake, the required credit score may vary.

3. Why 620? Understanding The Magic Number

A credit score of 620 is considered the entry point for what’s termed “acceptable” credit in the world of home loans. Lenders feel that this score demonstrates a certain level of financial responsibility and discipline. Additionally, statistics have shown that borrowers with a credit score of 620 or higher are less likely to default on their mortgage payments compared to those with lower scores.

4. Exceptions To The Rule

Always remember, while the credit score is a significant factor, it’s not the only one. Some lenders might be willing to look past a credit score that’s slightly lower than 620 if other aspects of your financial profile are strong. 

For instance, if you have a low debt-to-income ratio, a consistent income stream, and a solid employment history, these factors can work in your favor. The key is to shop around and discuss your options with multiple lenders.

5. Steps To Improve Your Credit Score

If you find that your credit score is below the desired threshold, don’t lose heart. Here are some actionable steps to give it a boost:

  • Review your credit report: Obtain a free copy of your credit report and look for errors or discrepancies. If you find any, report them immediately.
  • Pay down debts: Reducing the amount you owe, especially on high-interest credit cards, can positively impact your credit score.
  • Settle any outstanding bills: Late payments can wreak havoc on your credit score. If you’ve missed any payments, make them right away.
  • Avoid new credit inquiries: Every time you apply for a new credit card or loan, it’s recorded. Multiple inquiries in a short span can lower your score.
  • Seek credit counseling: If you’re overwhelmed, consider seeking the help of a credit counselor who can guide you on the right path.

6. The Bigger Picture: Other VA Cash-Out Requirements

While the credit score is undeniably essential, the VA also has other requirements for a Cash-Out refinance. These include:

  • Proof of income: To ensure you can make your new loan payments.
  • Adequate home equity: Typically, you can borrow up to 100% of your home’s value with a VA Cash-Out refinance, but this depends on your lender.
  • Occupancy: The home you’re refinancing must be your primary residence.
  • Certificate of Eligibility (COE): This proves you’re eligible for a VA-backed loan.


The VA Cash-Out Refinance program is an attractive option for veterans and active-duty military members. While credit score requirements can seem daunting, understanding the nuances can equip you with the knowledge to navigate the process. Always remember that while a credit score is a pivotal factor, it’s just one piece of the puzzle. 

By ensuring all aspects of your financial profile are strong and by partnering with a reliable lender, your dream of tapping into your home’s equity can become a reality.


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