What Credit Score Do You Need for a Conventional Loan?

Your credit score is one of the most important factors in conventional loan approval — but the rules are not as rigid as most people think. Here is exactly how credit score affects your eligibility, your rate, and your options.

The minimum credit score

For loans run through Fannie Mae’s Desktop Underwriter, there is technically no hard minimum credit score. DU evaluates the entire loan profile and can approve borrowers with lower scores when other factors are strong. In practice, most lenders require a minimum of around 620. Freddie Mac’s Loan Product Advisor sets a firm 620 minimum. For manually underwritten loans, Fannie Mae requires a minimum of 620 for fixed-rate loans and 640 for adjustable-rate mortgages.

For affordable programs like HomeReady, scores as low as 580 may be eligible in certain scenarios, though scores below 620 typically face additional conditions.

Which credit score is used?

For a single borrower, lenders use the middle of three scores from Equifax, Experian, and TransUnion. For multiple borrowers, Fannie Mae uses the average of each borrower’s middle score to determine eligibility.

How credit score affects your rate

Conventional loans use a pricing matrix called loan-level price adjustments (LLPAs). As your score decreases, the pricing adjustment increases — meaning a higher rate or more points at closing. The difference between a 760 and a 680 score on the same loan can be 0.5%–1.0% in rate.

Credit score and PMI cost

Your score also affects your PMI rate when putting less than 20% down. A borrower with a 760 score pays significantly less PMI than one with a 680 score at the same LTV — making the total monthly cost impact larger than just the rate difference alone.