What is typically required for a borrower to qualify for a Conventional Loan?

To qualify for a Conventional Loan, a higher credit score is typically required because lenders use credit scores to assess a borrower's creditworthiness. A higher credit score indicates that the borrower has a history of managing credit responsibly, which reduces the lender's risk. Conventional loans are often not insured or guaranteed by the government, and therefore, lenders place greater emphasis on the borrower's ability to repay the loan. A credit score above a certain threshold is commonly expected to get favorable loan terms, such as lower interest rates and reduced down payments.

The focus on a higher credit score reflects the lender's desire to ensure that borrowers can handle their repayment obligations reliably. This is crucial in a conventional loan scenario where the absence of government backing means lenders need due diligence to protect their investments.