Credit Score for Personal Loan: What You Need

A credit score for a personal loan depends on the lender, but many borrowers need at least fair credit to qualify.

A FICO Score of 580 to 669 falls in the fair range, while a score of 670 or higher is considered good and may help you qualify for better rates, higher loan amounts and more lender options. FICO classifies scores from 580 to 669 as Fair, 670 to 739 as Good, 740 to 799 as Very Good and 800 to 850 as Exceptional.

Your credit score matters, but it isn’t the only factor. Lenders may also review your income, current debts, employment, credit history, loan amount and ability to repay. Risk-based pricing lets lenders set rates and loan terms based on credit score, employment, income, outstanding debts and other factors.

Key Takeaways

A fair credit score may be enough to qualify for some personal loans. A FICO Score from 580 to 669 is considered fair, but your approval odds and loan terms may improve once your score reaches the good range of 670 or higher.

Your credit score affects the cost of borrowing. A stronger score may help you qualify for a lower APR, while a lower score can lead to higher rates, lower loan amounts, added fees or fewer lender options.

Lenders look beyond your score. Income, debt-to-income ratio, employment, credit history, loan amount and repayment term can all affect whether you qualify for a personal loan.

Summary generated by AI, verified by MoneyLion editors

What Credit Score Do You Need for a Personal Loan?

There's no single minimum credit score for every personal loan. Some lenders work with borrowers who have fair credit, while others prefer good or excellent credit.

As a general guide, a FICO Score of 670 or higher can improve your chances of qualifying for a personal loan with more competitive terms. Scores below 670 may still qualify, but lenders may charge higher APRs or limit how much you can borrow.

A higher score generally makes it easier to qualify for loans and lower interest rates, according to the CFPB. Many scores range from 300 to 850, but different companies may use different scoring ranges.

Is 650 a Good Credit Score for a Personal Loan?

A 650 FICO Score is considered fair credit.

You may qualify for a personal loan with a 650 credit score, but the lender may offer a higher APR, lower loan amount or stricter repayment terms than it would offer to someone with good or excellent credit.

Approval also depends on the rest of your application. A borrower with a 650 score, steady income, low debt and a clean recent payment history may look stronger than someone with the same score, unstable income and high credit card balances.

Can You Get a Personal Loan With Bad Credit?

You may be able to get a personal loan with bad credit, but it can be harder and more expensive. If your FICO Score is below 580, lenders may view your application as higher risk.

Some lenders specialize in loans for lower-credit borrowers, but the trade-off can be higher APRs, origination fees, smaller loan amounts or shorter repayment terms. Personal loan offers from some marketplace lenders can carry APRs that reach the mid-30% range, with the lowest APRs usually reserved for borrowers with stronger credit profiles.

Before accepting a bad-credit personal loan, compare the APR, fees, payment amount and total repayment cost. APR includes the interest rate plus certain fees, which makes it one of the most useful numbers to compare when shopping for a loan.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

How Credit Score Affects Personal Loan Costs

Your credit score affects whether you qualify, how much you can borrow and what APR you receive. A higher score helps you qualify for lower-cost offers, while a lower score may make lenders charge more to offset risk.

Lenders use their own processes to set rates and loan terms, often based on credit score, income, outstanding debts, employment and other factors.

Other Factors Lenders Review for Personal Loans

Your credit score is important, but lenders usually look at the full application before making a decision.

A strong income or low debt may help offset a fair score, but it may not erase serious credit issues like recent defaults, collections or repeated missed payments.

Personal Loan Approval by Credit Tier

The higher your score, the more flexibility you may have. Still, each lender sets its own approval rules.

Good credit does not guarantee approval. Poor credit doesn't automatically mean denial. Your income, debt, payment history and loan details still matter.

How To Check Personal Loan Offers Without Hurting Your Score

Many lenders let you prequalify with a soft credit check. A soft inquiry doesn't affect your credit score, while a hard inquiry can happen when you submit a formal loan application. Use prequalification to compare:

• Estimated APR

• Loan amount

• Monthly payment

• Repayment term

• Origination fee

• Funding timeline

• Prepayment penalty, if any

A soft inquiry can happen when you check your own credit or when a lender checks your report for a prescreened offer, and soft inquiries don't affect your score.

How To Improve Your Credit Score Before Applying

If you can wait before applying, improving your score may help you qualify for a better personal loan.

Pay Every Bill on Time

On-time payments help build a stronger credit profile. Missed payments hurt your score and make lenders question whether you can handle another payment.

Lower Credit Card Balances

High revolving balances raise your credit utilization. Lowering credit card balances may help your score once updated balances are reported to the credit bureaus.

Check Your Credit Reports

Review your credit reports before applying. Look for incorrect late payments, unfamiliar accounts, wrong balances or duplicate collections. Credit reports and scores affect your finances, and we recommend utilizing resources like the CFPB can help consumers understand reports, correct errors and improve credit over time.

Avoid Applying for Too Much Credit

Several hard inquiries in a short period can make your profile look riskier, especially if they are tied to unrelated credit applications.

Compare Personal Loan Offers

Compare APR, fees, term length and monthly payment. A lower monthly payment can look appealing, but a longer term can increase the total interest you pay.

What To Do if Your Credit Score Is Too Low

If your score is too low for the personal loan you want, you still have options.

Avoid borrowing if the payment doesn’t fit your budget. A personal loan can help with debt consolidation or a planned expense, but missed payments can damage your credit.

When a Personal Loan May Make Sense

A personal loan may make sense when you need a fixed amount, want predictable payments and can qualify for a reasonable APR. Common uses include:

• Debt consolidation

• Emergency expenses

• Medical bills

• Home repairs

• Moving costs

• Large planned expenses

Personal loans usually work best when they help you lower costs, simplify payments or cover a necessary expense with a clear repayment plan.

When To Be Careful With a Personal Loan

Be cautious if the loan has a high APR, steep origination fee or payment that strains your budget. A personal loan may not be the right move if:

• You’re using it for nonessential spending

• The payment leaves no room for savings

• The APR is higher than your current debt

• You’re likely to borrow again after consolidating debt

• You don’t have stable income

• You’re already behind on bills

A loan can solve a short-term cash need, but it can create bigger problems if it adds a payment you can’t afford.

The Bottom Line

The credit score for a personal loan depends on the lender, but fair credit may qualify and good credit can improve your options. A FICO Score of 580 to 669 is fair, while 670 or higher is good and may help you access better rates and terms.

Before you apply, check your credit reports, compare prequalification offers and review the full cost of the loan. Your score matters, but lenders also look at income, debt, employment and ability to repay.

Key Terms

• Credit score: A three-digit number based on your credit reports that helps lenders predict how likely you are to repay a loan on time.

• Annual percentage rate (APR): The total yearly cost of borrowing, including the interest rate and certain lender fees, shown as a percentage.

• Debt-to-income ratio: Your monthly debt payments divided by your gross monthly income. Lenders use it to measure whether you can handle another payment.

• Hard inquiry: A credit check that usually happens when you formally apply for credit and may temporarily lower your credit score.

• Prequalification: An early estimate of whether you may qualify for a loan, often based on a soft credit check that does not affect your score.

Sources:

• Consumer Financial Protection Bureau: What is a credit score?

• Consumer Financial Protection Bureau: What is the difference between a loan interest rate and the APR?

• Consumer Financial Protection Bureau: What is a debt-to-income ratio?

• Consumer Financial Protection Bureau: What is a credit inquiry?

• Consumer Financial Protection Bureau: What’s the difference between a prequalification letter and a preapproval letter?

Summary generated by AI, verified by MoneyLion editors

FAQ

What credit score is needed for a personal loan? There is no universal minimum credit score for a personal loan. Some lenders may approve borrowers with fair credit, while others prefer good or excellent credit. A FICO Score of 670 or higher may improve your chances of getting better terms.

Can I get a personal loan with a 650 credit score? Yes, you may be able to get a personal loan with a 650 credit score. A 650 FICO Score is considered fair, so you may qualify with some lenders, but your APR may be higher than it would be with good or excellent credit.

Can I get a personal loan with bad credit? Yes, but it may be harder and more expensive. Bad-credit personal loans can come with higher APRs, smaller loan amounts or extra fees, so compare offers carefully before borrowing.

Is 600 a good credit score for a personal loan? A 600 FICO Score is considered fair, not good. You may qualify with some lenders, but you may face higher rates or fewer options than someone with a score of 670 or higher.

Does applying for a personal loan hurt your credit? Prequalification often uses a soft inquiry that does not hurt your credit. A formal application can trigger a hard inquiry, which may temporarily lower your score.

How can I improve my chances of getting a personal loan? Pay bills on time, lower credit card balances, check your credit reports for errors, compare lenders with soft-pull prequalification and apply only for loans that fit your credit profile and budget.