What Credit Score Do You Need for a Personal Loan?

Laveta Brigham

If you need a personal loan but have a low credit score or a lot of debt, lenders are less likely to take on that risk now than before the coronavirus outbreak. That means approval is not impossible, but it’s more challenging if you have bad credit. RELATED CONTENT Good […]

If you need a personal loan but have a low credit score or a lot of debt, lenders are less likely to take on that risk now than before the coronavirus outbreak. That means approval is not impossible, but it’s more challenging if you have bad credit.


Good credit gives you the best odds of getting a personal loan at a low interest rate.

Generally, a FICO score of 680 can help you secure a personal loan, but the minimum credit score you need for approval largely depends on the lender.

Each lender has a different risk tolerance. Some offer loans for bad credit, while other lenders are more conservative and require good credit.

Here’s what to know about your credit score and how to qualify for a personal loan.

What Is the Minimum Credit Score for a Personal Loan?

Most lenders set a minimum credit score of 680 to qualify for a personal loan with competitive rates and terms, says Rod Griffin, senior director of public education and advocacy for the credit bureau Experian.

“Qualifying for a personal loan and getting the best rates are not the same thing,” he says.

Can you get a personal loan with a credit score of 550 or 600? It’s possible, but your options will be not only more limited but also more costly than if you had good credit.

Higher credit scores allow you to access loans with lower interest rates and better terms. “You could also qualify for a larger loan principal amount,” Griffin says.

What Are the Easiest Personal Loans to Be Approved for?

A low credit score doesn’t close you out of every personal loan. Certain lenders will work with borrowers who have credit scores of at least 580 or 600.

A credit score of at least 600 is the threshold to get a personal loan through LendingClub or Peerform.

  • Avant has personal loans for consumers with credit scores of at least 580.
  • OppLoans sets no minimum credit score for a personal loan, but the loan limit is $4,000.

How Can You Get the Credit Score You Need for a Personal Loan?

Establishing and maintaining a strong credit history, which results in a higher credit score, will position you to access the best personal loans. Your credit score is calculated based on information from credit reports compiled by the three major credit bureaus, Experian, Equifax and TransUnion.

Credit scores range from 300 to 850, with a score above 800 considered exceptional. Your score accounts for your payment history and credit utilization rate, a measurement of your available credit compared with your total credit limit.

Your credit card balances matter to lenders because, Griffin says, “If you max out your credit, you’ll have less of an ability to pay on a personal loan.”

If you have a low credit score, you’re not stuck with it forever. In fact, with some smart, basic financial steps, you can boost your FICO score easily and fairly quickly.

Here are some tips for establishing and maintaining good credit to get a personal loan:

  • Pay bills on time. Late or missed payments, including cellphone bills, can be reported to the credit bureaus. If you are having a tough time paying bills, contact your creditors before you fall behind to talk about relief programs that can keep your accounts in good standing.
  • Manage credit card balances. Your credit score can be lower if you have high card balances. Pay off your debts quickly, if possible.
  • Regularly check credit reports. The three major credit bureaus are offering free weekly online reports through April 2021 at AnnualCreditReport.com. If you notice suspicious activity on your credit card, report it immediately to the creditor.
  • Build your credit history. Tools such as Experian Boost can help you improve your credit score for a personal loan, credit card, car loan – or even a home equity line of credit. Experian Boost is designed to raise your FICO score by giving you credit for on-time cellphone, utility and certain streaming service payments, which normally don’t factor into credit scores. It can be helpful for establishing credit. “This is especially true for people with thin credit files, meaning they have fewer than five accounts open, or if you have a short credit history that is not enough to get a strong credit score,” Griffin says.

Should You Get a Personal Loan or a Credit Card?

“That can be because you will get a better interest rate for a big purchase or for making small home improvements,” he says.

“Just as there are different tools for different jobs, the same is true for credit,” he says. “A personal loan is something to consider if you know your income is stable and you will be able to pay off the debt. With today’s low interest rates, now can be a great time to take advantage of terms.”

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