VA Loan Credit Requirements Idaho: The 2025 Guide for Veterans

By Jerry Robinson, CEO, NMLS 4475 | 1st Choice Mortgage

If you are looking for the specific VA Loan Credit Requirements Idaho lenders use in 2025, you might be surprised by what you find. There is a persistent myth floating around the Treasure Valley that you need a “perfect” 740 credit score to use your hard-earned VA home loan benefits. We are here to tell you: That is false.

The VA loan is arguably the most powerful mortgage product on the planet. It was designed to help those who served - not to penalize them for a few bumps in the road. However, there is a difference between what the VA says and what individual lenders require.

At 1st Choice Mortgage, we specialize in helping Idaho veterans navigate these waters. Whether you are in Boise, Nampa, or Mountain Home, here is the reporter-style breakdown of exactly what lenders look for in your credit report.

The “Magic Number” Myth: What Score Do You Actually Need?

Here is the secret: The Department of Veterans Affairs (VA) does not actually set a minimum credit score. Technically, you could have a very low score and still meet the VA’s written guidelines.

However, almost all lenders have what are called “overlays” - their own internal rules. In 2025, here is the reality for most Idaho lenders:

• 620+ FICO: This is the “Gold Standard.” If your score is 620 or higher, you generally breeze through the automated approval process.
• 580 – 619 FICO: Approval is still very possible! It just might require a “manual underwrite,” which means a human being (Jerry or his team) reviews your file instead of a computer. We look for “compensating factors” like cash reserves or a long job history.
• 500 – 580 FICO:  1st Choice Mortgage in Meridian has lenders that will go down to 500 FICO scores on VA Loans.

The Secret Weapon: Residual Income

Unlike conventional loans that obsess over your Debt-to-Income (DTI) ratio, VA loans focus on something called Residual Income. This is the amount of money you have left over at the end of the month after paying your mortgage and major bills.

If you have strong residual income (which many of our Idaho veterans do), it can often outweigh a lower credit score.

Bankruptcy & Foreclosure: The Waiting Periods

Life happens. If you have a bankruptcy in your past, you aren’t disqualified forever. In fact, the “waiting periods” (seasoning) for VA loans are often shorter than for other loan types.

Chapter 7 Bankruptcy

The Rule: You generally need to wait 2 years from your discharge date.
Tip: Use this time to rebuild your credit with small, on-time payments.

Chapter 13 Bankruptcy

The Rule: You can often qualify after just 12 months of on-time payments into your Chapter 13 plan.
Note: You will need permission from the Bankruptcy Trustee, but we help clients with this all the time.

Foreclosure

The Rule: The standard wait is 2 years from the date the foreclosure was finalized.

Collections & Charge-Offs: Do I Have to Pay Them?

This is where the VA loan truly shines. For many other loan types, you are forced to pay off old collection accounts before you can close on a house. For VA loans, you are typically NOT required to pay off old collections or charge-offs to qualify.

The underwriter might ask for a simple letter of explanation, but you generally don’t have to drain your savings to pay off an old medical bill just to buy a home.

Idaho Housing (IHFA) & VA Loans

In Idaho, we also have the Idaho Housing Finance Association (IHFA). They offer special programs that can be layered with VA loans, sometimes offering lower rates or down payment assistance.

However, be aware that IHFA products often have stricter credit limits (usually requiring that 620 score) and income limits that vary by county (Ada vs. Canyon vs. Elmore). We can check if you qualify for both.

Frequently Asked Questions (FAQ)

1. Can I use a VA loan with a 500 credit score?

It is very difficult. While the VA has no minimum, most lenders stop at 580. A score of 500 would likely require significant credit repair before qualifying.

2. Does a divorce ruin my chances for a VA loan?

Not necessarily. If your divorce decree states that your ex-spouse is responsible for certain debts, we can often exclude those from your debt ratio, even if they still appear on your credit report. We just need a copy of the decree.

3. Do I need 3 tradelines of credit?

Ideally, yes. Lenders like to see at least 3 active accounts (credit cards, auto loans, etc.) with a 12-month history. However, if you don’t use credit, we can sometimes use “non-traditional” credit like rent history or utility bills.

4. Will one late payment deny my VA loan?

One late payment isn’t the end of the world, but the last 12 months are the most critical. If you have been on time for the last year, older late payments matter less. If you have a late payment in the last 12 months, we will need a strong explanation for why it happened.

Get Your DD-214 Ready!

Don’t let an online blog scare you away from applying. Credit reports are complex, and online algorithms often get it wrong.

Contact us today or apply here. We can pull your Certificate of Eligibility (COE) and give you a real, human review of your options.

1st Choice Mortgage Company
NMLS 380736
(208) 375-LOAN