Can I use a VA loan if my spouse has bad credit?
By Kyle Melvin · NMLS #1486450 · REV Mortgage ·
Short answer
Yes. If your spouse is not on the loan, their credit score is not pulled and does not affect the file; you qualify on your own income and credit. The two things that still apply: in a community-property state the lender must count your spouse's debts in your ratios even though they are not a borrower, and VA's residual-income test uses your whole household size regardless of who is on the loan. If you need your spouse's income to qualify, their credit comes with it.
VA underwrites the borrowers on the note. A spouse who is not on the note is not scored. That gives you a clean choice: if your income alone carries the debt-to-income ratio and the residual-income test, leave them off and their credit is irrelevant. If you need their income, their credit history is underwritten too, and the lender's overlay applies to the lower of the two scores.
Two things follow you either way:
- Community property. In Arizona, California, Texas, Washington, Nevada, New Mexico, Idaho, Louisiana and Wisconsin, Chapter 4 of the VA Lenders Handbook requires the lender to consider the non-borrowing spouse's debts, because those obligations are shared. The lender pulls a report to identify the debts; the spouse's score is not used. Several bases on this site sit in those states.
- Residual income. VA's cash-flow test uses your family size, so a spouse and children count as household members whether or not the spouse is a borrower. The VA loan guidelines page covers how the test works, and the credit-score answer covers what VA does and does not require of yours.
The spouse-on-the-loan answer covers title versus note, which is the usual follow-up.
Questions people also ask
- Will the lender see my spouse's credit at all?
- Only in a community-property state, where a credit report on the non-borrowing spouse is pulled to identify debts — not to score them. Elsewhere, no.
- Can my spouse be added to the loan later?
- Only through a refinance. You cannot add a borrower to an existing note. Title can be changed separately.
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