Conventional Loan With Bad Credit And Low Credit Scores

This guide covers qualifying for a conventional loan with bad credit and low credit scores. Conventional loans are called conforming loans because they must conform to Fannie Mae and/or Freddie Mac mortgage lending guidelines. Dale Elenteny, a senior mortgage loan originator at Gustan Cho Associates, says the following about conventional loans with bad credit and low credit scores:

Fannie Mae and Freddie Mac have mortgage guidelines for conventional loans. Borrowers must meet those guidelines to qualify.

Conventional loans have tougher guidelines than government loans, such as FHA, VA, and USDA. This is because conventional loans are not insured by a government agency, such as the following:

• Federal Housing Administration
• Department of Veteran Affairs
• USDA

In the following paragraphs, we will discuss how to get approved for a conventional loan with bad credit and low credit scores.

What Are Conventional Loans?

Conventional loans are private loans:

• Private lenders will originate and fund conventional loans
• Private lenders and banks use their warehouse line of credit to originate and fund conventional loans
• However, they need to sell conforming loans to the secondary mortgage bond market to Fannie Mae and Freddie Mac
• Fannie Mae and Freddie Mac will not purchase home mortgages that do not conform to their guidelines
• Lenders need to sell the loans they fund on the secondary market to Fannie or Freddie so they can pay down their warehouse line of credit and repeat the originating and funding home mortgage process
• Fannie Mae and Freddie Mac Agency Guidelines allow borrowers with bad credit to qualify for conforming loans
• Gustan Cho Associates are experts in helping borrowers qualify for a conventional loan with bad credit and lower credit scores

Conventional Loan With Bad Credit And Low Credit Scores

Learn how to qualify for a Conventional Loan with bad credit and low credit scores in 2025. Discover Fannie Mae and Freddie Mac guidelines, compensating factors, and tips to boost your approval chances with Gustan Cho Associates.

Can You Get a Conventional Loan With Bad Credit?

Many Americans think a conventional loan is only within reach for those with perfect credit, but this isn’t always true. While a higher score smooths the path, qualifying for a Conventional Loan with Bad Credit is still possible.

Fannie Mae and Freddie Mac’s honor guidelines include credit scores below the average line. The trick is to match these scores with solid factors, like a stable job, decent reserve funds, and a reasonable debt-to-income ratio.

Here at Gustan Cho Associates, we’ve built a solid track record of turning “no” into “yes” for clients whose credit stories may not be polished.

Understanding Conventional Loan Basics

Before we dive into the credit side, a quick refresher on conventional loans is useful. Conventional loans are not insured or guaranteed by the federal government—insurance programs like those for FHA and VA aren’t in play.

Because of this, the lender briefly assumes more risk, meaning credit score, debt-equity ratio, and income stability carry extra weight.

Conventional loans can be less expensive in mortgage insurance terms when compared to government loans, especially for homebuyers with the right financial profile. They can also be quicker to process, because less paperwork is often needed. Understanding this foundation helps the next pieces come into sharper focus.

Fannie Mae and Freddie Mac: Bad Credit Tolerance

Fannie Mae and Freddie Mac have adapted to changing housing markets by accepting blemished credit scores. Fannie Mae, for instance, may consider a borrower whose score dips as low as 620.

Freddie Mac’s threshold is similar, often accepting starts in the low 620s when other signs of credit strength are in evidence.

The key is providing extra proof that the borrower is on solid financial ground—pay stubs showing at least two years of steady income, bank statements documenting cash reserves, and a debt-to-income ratio smooth enough not to budget.

Focus on Compensating Factors

The big idea surrounding approval with less-than-stellar credit is “compensating factors.” In mortgage language, these are positive characteristics that help balance the risk posed by a low credit grade.

Common compensating factors include steady overtime, side income, and a second income supplied by family income.

Likewise, having a debt-to-income that’s 36 or less, reserves that equal two or more months of mortgage and other payments, and a sizeable down payment can quickly reshape risk calcs in the lender’s favor. Clever file structuring showcases these in the loan package, casting the application in the best light.

Strategies to Improve Approval Odds

Stronger submissions still turn the needle even with guidelines allowing for less-than-perfect credit. Begin with a credit tune-up: check the report, dispute errors, and temporarily pay off small, blemishing collections. Simultaneously, boost cash reserves before applying; two months of mortgage payments set aside can shift the risk view. Pre-qualifying with a lender specializing in scripts often speeds the path to closing, and upfront underwriter approval can make the path immeasurably.

Gustan Cho Associates Can Help

At Gustan Cho Associates, we like to say the journey to homeownership is still open, even if the credit path is marked with obstacles. Our team of in-house underwriting experts can craft a game plan that accents strengths, addresses weaknesses, and gets to closing quickly on a conventional loan with credit in the hot 620s. With strategic preparation, a reasonable action plan can allow borrowers to enter their new home, even with an imperfect credit record.

FAQs

Can I Get a Conventional Loan With a Score Below 620?

• However, approval is less likely and more lender-specific.
• Compensating factors carry heavy weight.

How Long After a Bankruptcy Can I Qualify?   

• Generally, a Chapter 7 bankruptcy must be at least four years old for a conventional loan.

Are Mortgage Insurance Costs Higher With Low Credit?

• Yes, low-score borrowers may face higher private mortgage insurance premiums.

Can I Get a Conventional Loan Without Verifying My Income?  

• Typically, unconventional programs like bank statement loans allow less income documentation.
• Those coming over to lenders, conventional lines of credit, and asset depletion to paint income muster.
• Sanity check the lender preference.

Should I Apply With Multiple Lenders?

• Yes, as long as the loans are within 45 days to minimize unique credit costs.

What Is a Conventional Loan?  

• A conventional loan is a mortgage from a bank or lender not backed by a government program (like FHA, VA, or USDA).
• To be sold to those agencies afterward, it must meet the rules set by the Fannie Mae and Freddie Mac programs.

Standard Credit Score Requirements  

• Until recently, most lenders wanted a 620 credit score or higher for a conventional loan.
• Sometimes, a borrower with a lower score can still get the loan if other parts of their application are strong.

Conventional Loan With Bad Credit: What Lenders Look For  

• When you apply for a Conventional Loan With Bad Credit, the lender looks at your entire financial picture.  

Compensating Factors That Help  

• Low debt-to-income ratio (DTI): Keeping your payments lower than your monthly income.
• Strong Employment History:  Steady work for the last two years or more.
• Large Down Payment (5 to 20% or more): The more money you can put down, the less the lender has to risk.
• Cash Reserves After Closing: Extra savings in the bank after the deal is finished.
• Minimal Recent Credit Issues: An on-time payment record within the last 12 months.

Recent Credit Events  

If you have gone through bankruptcy, foreclosure, or short sale, Fannie Mae and Freddie Mac mandate that you wait before you can qualify. Other paths may be open if you aren’t satisfied with the waiting time.

Conventional Loan Requirements for Low Credit Scores  

Minimum Credit Score for Conventional Loans  

620 is the cutoff that most lenders work with. However, anything higher tends to get you a better interest rate and lower monthly payments. If you are still under 640, be ready for a more careful review of your application.

Debt-to-Income Ratio Guidelines  

• Standard Maximum DTI: 45%  
• With Strong Credit: Lenders may go to 50%.
• With Bad Credit: Expect DTI caps of 36% to 43%  

Conventional Loan vs. FHA Loan for Bad Credit Borrowers  

Choose FHA for Simplicity  

FHA loans accept scores of 500 if you put 10% down. Conventional loans usually require better credit scores.

When to Choose Conventional

• To skip FHA MIP: Conventional loans often lack the upfront and monthly lender insurance that FHA loans do.
• High Loan Limits Help: If the home is in a county above the FHA ceiling, a Conventional loan may go higher without the stricter FHA process.
• PMI Cancellation Strategy: If you plan to build equity quickly and drop PMI at 20%, a Conventional loan can keep monthly payments lower, sometimes sooner than FHA.

Steps to Improve Approval Chances with Bad Credit

Even a few months can make a difference in a low score.

• Pay Down Cards: Lower the balance on revolving accounts to boost scoring models.
• Freeze New Credit Pulls: Each new application can ding your score; wait a year to build without hits.
• Set a 12-Month Calendar: Pay every account on time and see your history start to pull the score up.
• Grow Savings: Adding reserves in checking and savings proves you can cover issues later.
• Look for a co-borrower: If a friend or family member has a stronger score, see if they can get on the application to stabilize the risk.

How Gustan Cho Associates Helps Borrowers with Bad Credit

Gustan Cho Associates is the no-overlay lender you keep hearing about. Because we strictly follow Fannie Mae and Freddie Mac rules, we don’t pile on lenders’ overwrites, keeping processing faster and clearer. We still close loans others turn away, especially Conventional loans with weak credit.

Frequently Asked Questions (FAQs)

What is The Lowest Credit Score Allowed For a Conventional Loan?

• Generally, 620.
• If the score is above 640, the loan moves forward without extra scrutiny.
• Notes for the 620 to 640 crowd often call for lower debt ratios and a bank balance cushion.

Can I get a Conventional Loan with Accounts in Collections?  

• Absolutely.
• If those collections don’t hurt your automated underwriting decision, a conventional mortgage may still be on the table.

Do Conventional Loans Ask For Large Down Payments When Credit is Poor?

• You can start with as little as 3% down, but when your credit score is on the low side, lenders often ask for 5% to 20% instead.

Is Choosing FHA a Smarter Move Than Conventional With Low Credit?

• It really varies.
• FHA is usually a go-to for low scores. However, with conventional, you skip the lifetime mortgage insurance, which adds to savings over the long haul.

Can a Co-Borrower Help Me Get a Conventional Loan?

• Definitely.
• Bringing in someone with a stronger credit profile and steady income can tip the scales in your favor.

Do Conventional Loans Permit Manual Underwriting?  

• No, they don’t.
• Only FHA, VA, and USDA lend with that process.
• Conventional loans go through automated systems every time.

How Long After Bankruptcy Can I Take Out a Conventional Loan?

• You’re eligible four years after a Chapter 7 discharge and two years after you complete a Chapter 13 repayment plan.

Can I Switch To a Conventional Loan if I Have Bad Credit?  

• Yes, as long as you hit the lender’s credit score and equity benchmarks.

Does Having Bad Credit Mean My Interest Rate Will Be Higher?

• Definitely.
• Your credit score plays a big role in determining the interest rate you get on a conventional loan.
• The lower the score, the higher the rate you may face.  

How Can Gustan Cho Associates Step in When I’ve Been Denied?

• We focus on Conventional Loans With Bad Credit.
• Many of our clients have been turned down by other lenders because of strict rules, called overlays.
• We have the flexibility to make exceptions.  

You can still qualify if a credit issue got you a “no” from another bank. Gustan Cho Associates is the lender that can close what others can’t. Call us now at 800-900-8569 or click on Apply Now. Let’s see if you can get a Conventional Loan With Bad Credit.

Can I Qualify For A Conventional Loan With Bad Credit

There are instances where borrowers with bad credit need to go with conventional versus FHA loans. FHA loans are very popular for borrowers with lower and prior bad credit scores. Getting an approved/eligible per the automated underwriting system (AUS) with bad credit on an FHA versus a Conventional loan with bad credit is easier. Borrowers with credit scores of 500 FICO can qualify for an FHA loan with an approved/eligible per AUS. The minimum credit score requirement on conventional loans is 620 FICO. John Strange, a senior mortgage loan originator for Gustan Cho Associates, says the following about Conventional loans with bad credit and low credit scores:

Outstanding collections and charged-off accounts do not have to be paid to qualify for FHA and conventional loans. Conforming loans allow for financing a second home and an investment home.

Government loans are for owner-occupant primary home financing only. The waiting period requirements after bankruptcy, foreclosure, deed in lieu of foreclosure, or a short sale are longer on conventional loans than on FHA loans. FHA loans no longer exempt deferred student loans that have been deferred for more than 12 months. HUD does not accept income-based repayment (IBR payments) on FHA loans. Fannie Mae and Freddie Mac accept income-based repayment (IBR Payments) on conventional loans.

Conventional Loan With Bad Credit Mortgage Guidelines: Minimum Agency Guidelines

Two different types of loan guidelines conform. The first is the minimum agency guidelines of Fannie Mae or Freddie Mac. The second is lender overlays set by each lender. Lenders require all borrowers to meet the minimum agency guidelines of Fannie Mae or Freddie Mac. Mike Gracz, a senior mortgage loan originator at Gustan Cho Associates says the following about lender overlays imposed by individual lenders on government and conventional loans:

Each lender can have higher lending requirements above and beyond the minimum agency guidelines of Fannie or Freddie. Lenders can have lender overlays on just about anything.

For example, lenders can require higher credit score requirements for second home financing or investment home mortgages. A lender can require a 660 to 680 credit score for second home and investment home financing when the minimum conventional loan guidelines are set at a 620 FICO. A lender can set a lender overlay on debt-to-income ratios at 45% DTI when Fannie and Freddie allow a maximum DTI cap at 50%. The good news is that lenders like Gustan Cho Associates have no lender overlays on government and conventional loans.

Minimum Conforming Mortgage Guidelines on Conventional Loans

Below are the minimum conforming mortgage guidelines on conventional loans:

• You must be a US citizen and/or legal resident
• The minimum credit score of 620 is required on all conventional loans
• Minimum down payment of 3% for first-time homebuyers
• Seasoned home buyers require a 5% down payment
• First-time homebuyers are defined as homebuyers who have had no ownership in a home in the past three years
• Private mortgage insurance (PMI) is required for home buyers with down payments less than 20%
• 2-year work history is required
• Fully documented income
• Debt-to-income ratio of 50% or less
• There is a four-year waiting period after the Chapter 7 Bankruptcy discharge date
• There is a four-year waiting period after a deed instead of foreclosure and/or as a short-sale
• There is a seven-year waiting period after a regular foreclosure
• There is a two-year waiting period after the Chapter 13 Bankruptcy discharge date
• There is a four-year waiting period after a Chapter 13 Bankruptcy dismissal date

Self-employed borrowers can qualify for conventional loans with two years of experience as self-employed workers and two years of income tax returns.

Credit Scores Versus Conventional Mortgages

Conventional loans are extremely credit score-sensitive. The lower the borrower’s credit scores, the higher the mortgage rates. Lower credit scores are viewed as riskier borrowers. So, for borrowers to get the best rates, they need higher credit scores and lower loan-to-values. Dale Elenteny, a senior mortgage loan originator at Gustan Cho Associates says the following about qualifying for a conventional loan with bad credit and low credit scores:

Borrowers can qualify for a conventional loan with bad credit. Homebuyers seeking the best conventional mortgage rates will need credit scores of at least 740.

Debt-to-income ratio is also a factor in conforming mortgage rates. Borrowers need at least 20% equity in the home to get the par rates on conventional loans. Any credit scores lower than 740 will get pricing adjustments, known as LLPA (LOAN LEVEL PRICING ADJUSTMENTS). The minimum credit score to qualify for conventional loans is 620. A 620 credit score is considered a very low credit score for conventional loans.

Cases Where Conventional Loans Are The Only Option

As mentioned earlier, homebuyers can qualify for a conventional loan with bad credit. However, the chances are that you will be paying a very high interest rate. Here is a hypothetical case scenario:

• Prime borrower
• Prime borrowers are borrowers with at least a 740 credit score and a 20% down payment
• Get quoted a conventional mortgage rate of 4.0%
• A borrower seeking a conventional loan with bad credit, for example, a 620 credit score, may be quoted a rate of 5.0%
• These conventional mortgage rates are not real quotes and are just for illustration purposes

This article will discuss and cover conventional loans with bad credit and low credit scores.

How Credit Scores Impact Conventional Loans With Bad Credit vs FHA Loans

FHA loans are not credit-sensitive like conventional loans. This is because the government insures government loans against borrowers’ default. Conventional loans are not. Cases where borrowers need to go with conventional loans instead of other types of loans, such as FHA, VA, and USDA loans, are homebuyers purchasing second homes, vacation homes, or investment homes. FHA, VA, and USDA loans are only for primary residences. Homebuyers need to purchase only owner-occupied homes.

Other cases where home buyers need to go with conventional loans instead of FHA loans are when they want to purchase a condominium and the condominium complex is not FHA condo-approved.

In general, conventional loans are for people with good credit. Since no government agencies guarantee conventional loans, lenders have stricter mortgage underwriting guidelines. They need to go with conventional loans. Conventional loans have higher loan limits than FHA loans. If a homebuyer with bad credit and low credit scores is trying to get a house that exceeds the FHA loan limit, they need to get approved for a conventional loan with bad credit.

Conventional Loan With Bad Credit Low Credit Scores Guidelines

No government entity can guarantee conventional loans. Conventional lenders normally want borrowers to put a 20% down payment on a home purchase. Borrowers can put as little as 3% or 5% down payment on a home purchase. John Strange, a senior mortgage loan originator at Gustan Cho Associates, says the following about private mortgage insurance on conventional loans:

Private mortgage insurance is required for borrowers with less than a 20% down payment. Borrowers pay for private mortgage insurance to benefit lenders if the borrower defaults on their loan.

Homebuyers can qualify for a conventional loan with low credit scores. The minimum credit score required on conventional loans is 620.

Conventional Loan With Bad Credit and Low Credit Scores Lending Requirements

Borrowers can qualify for a conventional loan with low credit scores. The minimum credit score required for conventional loans is 620 for low credit scores. Borrowers with credit scores under 620 will not qualify for conventional loans. Alex Carlucci says the following about qualifying for a conventional loan with  low credit scores:

Borrowers must try to boost their credit scores to above 620 to qualify for a conventional loan. In addition to meeting the minimum 620 credit score, the maximum debt-to-income ratio allowed on conventional loans is 50%.

For borrowers with a prior bankruptcy, there is a four-year mandatory waiting period after the discharge date of Chapter 7 Bankruptcy. There is a two-year waiting period after the discharge date of Chapter 13 Bankruptcy. There is a four-year waiting period after the dismissal date to qualify for a conventional loan after Chapter 13 dismissal. There is a four-year waiting period after a deed-in-lieu of foreclosure or short sale. The waiting period is seven years to qualify after a standard foreclosure.

Benefits of Conventional Loans

There are instances where borrowers need to go with conventional versus FHA loans. Fannie Mae and Freddie Mac allow income-based repayment on deferred student loans. This holds even if the IBR payment on student loans is zero monthly. Under updated HUD and USDA Agency Mortgage Guidelines, income-based repayment is now allowed as long as the IBR payment reports to the credit bureaus. Dale Elenteny explains the following about qualifying for a conventional loan with low credit scores:

HUD and USDA require mortgage underwriters to take 0.50% of the outstanding student loan balance as a monthly hypothetical debt when calculating the borrower’s debt-to-income ratio.

VA loans allow deferred student loans that have been deferred longer than 12 months to be exempt from DTI calculations. On deferred student loans for less than 12 months, the VA requires underwriters to multiply the student loan’s balance by 5%. Could you take the resulting figure and divide it by 12? The resulting number is the amount mortgage underwriters must take and use as a monthly hypothetical debt on student loans.

Down Payment Requirements on Conventional Loans

Fannie Mae and Freddie Mac now allow a 3% down payment on conventional loans for first-time homebuyers. Fannie Mae and Freddie Mac define first-time homebuyers as those who have not owned a home for at least three years. Normally, the minimum down payment requirement for conventional loans is a 5% down payment. To get the best mortgage rates on conventional loans, borrowers need a 740 credit score and a 20% down payment. Mortgage rates on conventional loans increase as borrowers’ credit scores get lower. Prior bankruptcies, foreclosures, deed-in-lieu of foreclosures, or short sales have no impact on mortgage rates with conventional loans.

How Lower Credit Scores Hurt Borrowers With Higher DTI

Most conforming borrowers will have difficulty qualifying with 50% debt-to-income ratios. Fannie Mae and Freddie Mac now allow up to 50% debt-to-income ratios.

Most private mortgage insurance companies will not insure borrowers with over 45% debt-to-income ratios unless their credit scores exceed 700.

This puts a drain on many borrowers with higher debt-to-income ratios and under 700 credit scores. The great news is that Gustan Cho Associates has investors who will allow conventional borrowers up to 50% debt-to-income ratios with under 700 credit scores.

Requirements For a Conventional Loan With Bad Credit

To qualify for a conventional loan with bad credit, borrowers must meet conforming mortgage guidelines. Here are the basics in qualifying for conventional loans:

• Have at least a 620 credit score
• Been timely on their monthly credit obligations for the past 12 months
• 3% down payment for first-time home buyers and 5% down payment for seasoned home buyers
• The maximum debt-to-income ratios required are no greater than 50%
• The minimum waiting period after Chapter 7 Bankruptcy is 4 years after the discharge date
• At least 4 years out of deed instead of foreclosure
• At least 4 years out of the short sale
• At least 7 years out of foreclosure
• Borrowers with outstanding judgments and/or tax liens can qualify with a written payment agreement with the judgment creditor and/or Internal Revenue Service and have at least three months of payment history

Frequently Asked Questions on Conventional Loans With Bad Credit and Low Credit Scores

A bad score or credit history does not entirely disqualify you from applying for a conventional loan. However, there are some issues you may need to tackle. The following section covers our most popular queries on receiving a conventional mortgage with a less-than-ideal credit history and how to enhance the chances of receiving approval.

Can I Qualify for a Conventional Loan with Bad Credit?

• Yes, but it’s more difficult.
• There are no government-financed options for a conventional loan, meaning stricter credit problems.
• With most lenders, the low pass score is 620.
• However, some lenders with stricter requirements are willing to take borrowers with bad credit and low credit scores for a conventional loan.
• This would mandate solid contradicting factors, such as a low debt-to-income ratio and a high down payment.

What Credit Score is Required for a Conventional Loan?

Here are the common ranges of credit scores and corresponding loans for each.

• Credit Score              Loan Eligibility
• 740 and above         : Best rates and terms available
• 700-739                     Good Rates.
• 620-699                    Higher mortgage rates.
• Below 620                 : Difficulty in getting qualified.

VA and FHA loans offer more beneficial terms for scores lower than 620.

What Are the Minimum Down Payment Requirements?

• Having a credit score of 620 or more means you qualify for an eligible Fannie Mae’s HomeReady® or Freddie Mac’s Home Possible® program with a 3% down payment.
• If your score is below 620, putting down more than 10-20% will improve your chances of getting approved.

Will I Pay Higher Interest Rates with a Low Credit Score?

• Yes.
• Conventional loans are backed by credit, so low credit scores significantly affect these rates.
• Someone with a score of 620 will pay 1-2% more interest than the average for the said score.
• Comparatively, Someone above 740 will pay much lower interest.
• This will drastically change how much you can pay monthly for your mortgage.

What Other Factors Help Offset Bad Credit?

Is your credit score still low? You may still get approved with:

• ✔ Having a generous down payment (10-20%) – Reduces lending risk.
• ✔ Sustainable DTI ratio – Is lower than the 36% cap.
• ✔ Employment history – Having a stable job for at least two years.
• ✔ Cash reserves – Having savings that can cover 3-6 months of mortgage payments.
• ✔ Someone who applies alongside you – A person with good credit can strengthen your application.

Will I Be Able to Obtain a Conventional Loan After a Bankruptcy or Foreclosure?

Yes, but there are some waiting periods.

Event Waiting Period For Conventional Loan

• Chapter 7 Bankruptcy 4 years from discharge date High school essay.
• Chapter 13 Bankruptcy 2 years from discharge or 4 years from dismissal.
• Foreclosure: 7 years.
• Short Sale / Deed-In-Lieu 4 years (2 years with extenuating circumstances)

PMI Removals

Yes! Unlike living loans, which require mortgages forever, conventional loans are more flexible. Convention loans allow for PMI removal after a 20% home equity increase.

Should I Go for an FHA Loan Instead?

If your credit score is bad, below 620, then an FHA loan can be a better choice because:

• ✔ FHA loans accept scores as low as 500 with 10% down or 580 with 3.5% down.
• ✔ Granting more rigid terms of past bankruptcies and foreclosures.
• ✔ Withering lower interest rates.

However, an FHA loan is much more expensive in the long run because it requires MIP for the entire loan duration.

How Can I Increase My Approval Chances?

Here’s how you can increase your odds of getting a conventional loan approved with bad credit.

• Raise your credit score (pay down debts and dispute inaccuracies on your credit report).
• Set aside savings for a greater down payment (10 to 20 percent lowers lender risk).
• Reduce your DTI ratio (pay down some debts before applying).
• Look for lenders that may differ (some lenders have lower credit score requirements).

Who Offers the Most Affordable Conventional Loan for Bad Credit?

A few lenders focus on low-credit-score mortgages or have unique means of offering approvals. Try:

• FHA Bad Credit Lenders – Will take customers with credit scores of 620 and above.
• Non-QM Mortgage Lenders: Partners with clients who have less-than-ideal credit files.
• GCA Mortgage Group: Has a more lenient policy regarding credit scores.
• Great Content Authority Forums Mortgage Group: This lender is sometimes more forgiving than larger commercial banks.

Pro Tip:

• Shop with various lenders and banks to gauge their rates and criteria before applying.

Final Takeaways

Obtaining a conventional loan with bad credit is difficult but not impossible. If you:

• Have a credit score that is above 620,
• Can make a bigger down payment,
• And possess strong compensating factors,

You could still qualify for a conventional loan mortgage. However, your credit score is below 620. In that case, consider FHA loans or, better yet, improve them before applying.

Questions more geared toward comments? Don’t be shy! Could you share with us below?

Homebuyers who need to qualify for conforming or government loans with a direct lender with no overlays should contact Gustan Cho Associates at 800-900-8569 or text us for a faster response. They can also email us at gcho@gustancho.com. We are a five-star national mortgage company with no lender overlays on government and conventional loans.