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.
Oct 15, 2020

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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 FICO and above), but some lenders accept borrowers with bad credit (below 630).

The minimum credit score to qualify for a personal loan is typically 610 to 640, according to an anonymized dataset of NerdWallet users who pre-qualified for personal loans.

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 always mean you’ll qualify for a loan.

Lenders have a range of criteria they consider on an application. Some 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 develop their own scoring systems for applicants based on data they collect about borrowers.

  • 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.

Personal loans for fair or bad credit

Though lenders consider a few 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.

Loan applications can cause a temporary dip in your score. Pre-qualifying can show you potential loan offers and won’t hurt your credit score. If you don’t qualify for the loan you want, you can boost your chances with a co-signer or by building your credit.

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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