What Credit Score Is Needed for a Personal Loan?

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What credit score is needed for a personal loan

Like all forms of credit, you have to follow the rules if you want to get approved for a personal loan. While you don’t need a perfect credit score, lenders typically like to see a range of 670 to 739. A score in the good range will get you a better interest rate and save you money. Credit score not quite there yet? Don’t worry because there are ways to improve your score and increase the likelihood of approval. 

Curious about what personal loan offers are available to you?  MoneyLion helps you find personal loan offers based on your background and info you provide. You can get matched with offers for up to $50,000 from top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

How your credit score impacts a personal loan application

You can’t talk about your credit without talking about your credit score. Your credit score ranks your creditworthiness, which impacts your approval odds. Your credit score may determine if you will get approved for a loan and the interest rate on your loan if approved. 

Minimum credit score for a personal loan

You might worry that you don’t have the credit score for a personal loan. While a credit score of 670 and above is generally considered good, it is not necessarily the minimum score to get you approved. Some lenders accept a credit score as low as 560 for a personal loan. However, a lower credit score may mean a higher interest rate, the need for a co-signer, or a collateral requirement. 

Other factors that affect your eligibility for a personal loan

Your credit score is an important factor in your eligibility for a personal loan, but other things matter, too.

Income level

Income plays a part in your approval odds and your interest rate when it comes to a personal loan. You might have the credit score to get approved for a loan, but if your income does not reflect your ability to pay it off on time, lenders may avoid lending to you or approve you for a lower amount. Don’t let your income deter you, but remember that it does play a role in your approval. 


If you are getting a secured loan, you need collateral. Collateral might be a vehicle, house, or cash savings. Much like income, your collateral must be sufficient to make lenders comfortable about taking a risk with you. If you are taking out a secured loan, lenders want to ensure not only can you pay the loan back, but if you do default, your collateral covers the loan amount. 

Debt-to-income ratio

Your debt to income (DTI) ratio is how much you owe compared to how much you bring in each month. It is determined by adding up your monthly debts and dividing them by your gross income. Most lenders seek a DTI of 36% or lower.

How to get a personal loan with an imperfect credit score

If your credit score isn’t where it needs to be, consider these ways to get a personal loan. 

Consider a co-signer

A co-signer signs onto your loan, agreeing to pay the loan back if you can’t. Your co-signer would need to have credit good enough to get approved. Being a co-signer is a big responsibility that should not be taken lightly. If someone agrees to be a co-signer, they agree to pay the loan if you default. 

Opt for a credit builder loan

Credit builder loans are a great way to get the extra funds you need while helping build your credit. You can usually borrow $1,000 or less with a credit builder loan. Once you get the loan, you make monthly payments toward the amount. Your monthly payment could also include fees and interest. Once the balance is paid, you can access the funds. 

Your payment history is reported to the credit bureaus showing that you can manage loan payments, thus helping to increase your credit score. Making your payments on time with all loans is essential, and a credit builder loan is no different. It’s a chance to increase your credit score while getting access to cash. 

Considering a way to build your credit? Join MoneyLion WOW membership and apply for up to a $1,000 Credit Builder Loan with a competitive rate and no hard credit check.

Look into 0% APR cash advances

If you don’t have the credit score for a loan but qualify for a credit card, consider a 0% APR cash advance as a way to borrow money. Credit card promotions may include 0% APR on cash advances for a specific time. For example, your credit card might run an offer allowing cash advances with no interest for one year. If you have the available credit, use this as a way to get your hands on loan money. Be sure to pay off the loan amount before the promotional period ends, as cash advance interest rates tend to be higher. 

Explore peer-to-peer lending

Peer-to-peer lending, or marketplace lending, is a nontraditional method of loaning money. With peer-to-peer lending, you receive a personal loan from an investor instead of using traditional banks or financial institutions. You complete an application through a peer-to-peer lending company, and the company can then connect you to lenders. Use a reputable peer-to-peer lending site to avoid being scammed. 

How to improve your credit score for a personal loan

If you aren’t in a hurry to get your loan, consider improving your credit score to increase your approval chances. Bear in mind, improving your credit score can take time.

Cut down your spending 

You can reduce your spending to increase your savings or disposable income. This change, which sounds so simple but is challenging to follow through on, can give you access to additional cash, allowing you to pay down other debts or potentially reduce the need for a loan in the first place. A monthly budget can help. You could start seeing improvement in just a few months.

Pay your bills on time

Payment history plays a significant role in determining your credit score. When you consistently pay your bills on time, you will see a boost in your credit score. Set reminders and alerts, or sign up for autopayments to ensure your payments get submitted on time, every time. Once you make it a habit, not only will you be ready to start making your personal loan payments, but you’ll save money on late fees and penalties. 

Don’t apply for new credit just yet

Wait to apply for any new credit, including personal loans. Applying for new credit drops your credit score a few points, increases your DTI, and can cost you more money. Hold off for a few months while making your payments on time and cutting down your spending to help see improvements in your score. 

Monitor your credit report

Monitoring your credit report is crucial to staying on top of your credit score. You are entitled to one free credit report from all three credit bureaus annually. Accessing your credit report lets you make sure your credit information is accurate and stay on top of possible identity theft. Having inaccurate information on your report affects your credit score, so you want to catch errors early and avoid a bigger mess. 

Is your credit score good enough for a loan? 

The credit score needed for a loan can be as low as 560 with some lenders, but the tradeoff is a higher interest rate. If you feel like your credit score for a loan isn’t the best, consider alternate methods like finding a co-signer or a 0% cash advance. If you want to focus on building your credit, you can do that too. Start by setting and following a budget and paying bills on time. Check your credit report and make sure the information is correct. 

Maintaining your credit is an essential part of your financial health. Follow these steps to create habits that can help you qualify for a personal loan and keep your finances in order. 


Why do I need good credit for a personal loan?

Good credit is an indicator to lenders that you are financially responsible and will pay your loan on time. 

Can I get a personal loan with a 650 credit score?

A credit score of 650 is considered a Fair score and should give you access to most personal loans. Creditors look at factors such as income and debt, too. 

Can I get a personal loan with bad credit?

Getting a personal loan with bad credit could be challenging. Consider other options like a credit builder loan or getting a co-signer if you need a loan. 

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