What credit score is needed for a conventional loan?

Conventional loans are mortgage loans that are not backed by the government, unlike Federal Housing Administration (FHA), Veterans Affairs (VA), and United States Department of Agriculture (USDA) loans.

These loans have stricter guidelines and credit score requirements. In order to qualify, you need a credit score of around 620 or more. The higher your score, the lower your down payment can be. You also get loans for more attractive interest rates.

Because these are not government-backed, lenders can also impose their own rules apart from the guidelines set by the government on loan limits and credit scores. In addition to your credit score, lenders look at your debt-to-income ratio, your employment history, and your overall financial situation to decide if your loan should be approved.

It is advisable to first research the available loan options and save up so you have a sizable down payment that will reduce your monthly installment amounts.

Build credit, save up, and do your research before applying for that much-awaited home loan.