Credit

What credit score do I need for a conventional loan?

Short answer

620 is a common minimum for many conforming conventional loans, but approval and pricing depend on the full file, automated underwriting, lender overlays, credit history, LTV, and occupancy. 740+ typically unlocks the strongest rate and PMI tiers. Below 620, conforming options narrow quickly.

Plain-English explanation

Fannie Mae and Freddie Mac generally require a 620 minimum for conforming conventional. The lender's automated underwriting (DU or LP) checks the 'lower middle FICO' across all borrowers. Below 620, conforming usually doesn't work — alternatives are FHA (down to 580 with most lenders) or non-QM. Above 620, every 20-point improvement (660, 680, 700, 720, 740, 760) typically nets better pricing through LLPAs and lower PMI. Subject to lender overlays.

Practical example

A buyer at 620 with 5% down and clean recent credit may clear conventional but pay materially higher PMI than a buyer at 740 with the same down payment. The 740 file's monthly PMI cost can be 50-70% lower — that's real money over a 5-10 year hold.