When you apply for a VA guaranteed home loan, you are required to give your consent to a series of lender verifications on your employment history, credit history and credit score.
But the lender isn’t permitted to do these checks without permission–VA loan rules require the borrower’s authorization in order to proceed.
According to the VA Lender’s Handbook, Chapter 4, in the section called How To Underwrite A VA Guaranteed Loan, the lender is instructed to “Obtain all necessary verifications” using your authorization.
According to the rules, “The applicant’s authorization can be obtained for each verification needed, or on one blanket authorization form (attach a copy of the blanket authorization to each verification requested, including VA Form 26-8937, Verification of VA Benefits, if applicable).”
Your authorization gives the lender the legal permission to request credit data on you from the three major credit reporting agencies. Some borrowers wonder why the permissions are needed–can’t you just request your own credit reports and deliver them to your bank?
VA loan rules don’t allow this. The lender is instructed, “these documents must always be delivered by the credit reporting agency or verifying party directly to the lender or its agent, and never to another party. That is, while a lender may delegate authority for a builder, realtor, or other person to order the report for the lender, the report may not be delivered to such builder, realtor, and so on, and may not pass through the hands of any such party or the applicant.”
Your credit data is an important part of the VA loan application process, and getting your permissions to the lender to request it is just as important–your loan application can’t move forward without these permissions.
Do you have a question about the VA home loan process? Ask us in our comments section.
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