What Credit Score Do You Need for a Personal Loan?

Your credit score is one — but not the only — factor that lenders use to decide your rate and loan amount.
Last updated on Oct 26, 2022

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Credit score requirements for personal loans vary across lenders. Many give preference to borrowers with good or excellent credit scores (690 and above), but some lenders accept borrowers with bad credit (a score below 630).

The typical minimum credit score to qualify for a personal loan is 560 to 660, according to lenders surveyed by NerdWallet. Some lenders may require a higher score.

A high credit score doesn’t guarantee you’ll qualify or get a low interest rate. Qualifying rests largely on your creditworthiness, which is usually a combination of your credit history and score, in addition to income and debt. Use the calculator below to learn what loan options you may have based on your credit score.

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What you need to qualify for a personal loan

Just because you meet a lender’s minimum credit score requirement doesn’t mean you’ll qualify for a loan.

Lenders have a range of criteria they consider on an application. Some lenders look at alternative data, like where you went to college and what field you work in. Others look mostly at your credit report and history, along with your income and debts.

Here’s what most lenders look at on a personal loan application:

  • Credit score: Many lenders look at the FICO credit scoring model, but some use VantageScore. Other lenders say they use many data points about a borrower to determine approval, which may include a FICO or VantageScore.

  • Credit history: Lenders like to see a long credit history on a loan application. A lender may say it requires a minimum of two or three years of credit history, but longer is typically better. More accounts throughout your credit history shows a lender how diligently you’ve made payments. Borrowers with multiple credit cards, a mortgage, or an auto loan showing regular on-time payments may be more likely to qualify.

  • Debt-to-income ratio: Lenders seek borrowers who make enough money to meet their current monthly financial obligations, plus loan payments. Many use your debt-to-income ratio to see whether another loan would overextend your finances.

  • Free cash flow: Your debt-to-income ratio doesn’t account for expenses like gas, groceries and rent, so some lenders look at bank account transactions to see how much money borrowers have left after other expenses. Lenders call this “free cash flow,” and the more of it you have, the more confident a lender may feel approving your application.

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Personal loans for fair or bad credit

Though lenders consider multiple factors on a loan application, your credit score is often given a lot of weight.

Borrowers with fair or bad credit often qualify for high rates, which can be up to 36%. A low credit score could also be the reason a lender approves you for a low loan amount.

Lenders that offer fair-credit loans may look beyond your credit score to make a loan decision. Credit unions, for example, look at a member’s standing with the credit union and other factors on an application.

How to compare personal loans

Here are a few factors to consider when deciding between personal loan lenders:

Annual percentage rates. The APR is the total cost of the loan with interest and fees. APR provides an apples-to-apples cost comparison across personal loans and other financing options.

Pre-qualifying with a soft credit check. Many lenders let you pre-qualify to preview your potential interest rate and monthly payments before applying for a loan. Pre-qualifying won’t affect your credit score and can help you decide which personal loan fits your budget and borrowing needs.

Joint loans. Adding a co-borrower to an application can bolster your chances of qualifying for a personal loan. Not all lenders offer joint loans, but adding someone with good credit and strong income can help you get a lower rate or larger loan amount. With a joint loan, your co-borrower is also responsible for payments.

Secured loans. Secured loans require borrowers to provide collateral in order to get a loan. The collateral can be money in a savings account, permanent home fixtures or a car, which the lender can take if you don’t repay the loan. Secured loans can help borrowers with low credit scores qualify for a loan or get a better rate than on an unsecured personal loan.

Special features. Lenders may offer perks like credit-building assistance, free career coaching, and unemployment or hardship assistance. If you have two affordable loan offers, check for additional benefits that might help you pick which one is the best fit for you.

More calculators

Personal loan calculator: Learn how much your monthly payments could be, based on your loan amount, term and credit score.

Debt consolidation calculator: Find out how much consolidating your debt could save you.

Debt-to-income calculator: Determine your debt-to-income ratio and learn how lenders use it.

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