What credit score do I need for a personal loan?

Credit scores impact factors like borrowing limits and interest rates

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Best Egg, LightStream and Upstart
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Your credit score is one of the biggest factors lenders consider when approving a loan. While good or excellent credit can open the door to the broadest possible list of loans, fair credit or poor credit means you'll have limited borrowing options, or you may not get approved at all.

How much you can borrow, the interest rates you'll pay and potential loan fees are all influenced by your credit score. As such, if you have a low score and don’t need financing in a hurry, you’ll want to improve your credit score before you borrow.

Key insights

  • While there is no specific minimum credit score for all personal loans, lenders have their own individual requirements.
  • Your credit score can impact whether you get approved for a loan, and also the interest rates and loan fees you'll pay.
  • If you can wait to apply for a personal loan, taking time to improve your credit score before you borrow can yield significant savings.

What is the minimum credit score to get a personal loan?

There's no such thing as a minimum credit score for all personal loans, although most lenders have specific approval criteria that may or may not be published and widely available.

For example, Upstart says it considers candidates for a personal loan with a minimum credit score of 300 — the lowest credit score a person can have. Meanwhile, Avant offers personal loans to individuals with credit scores as low as 580. According to FICO, a credit score of 580 is the threshold where "fair credit" begins.

As another example, LightStream says it approves loan applicants with "good-to-excellent credit profiles." This information is somewhat vague, but we can presume this means a FICO score of at least 670.

As you look for personal loan companies, keep the following credit score ranges (for FICO scores) in mind:

  • Exceptional: 800+
  • Very good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Poor: 579 or below

» MORE: What is a good credit score?

Loan factors affected by credit score

Your credit score can determine which lenders might approve you for a loan, but that's not all. Other borrowing factors can also be heavily influenced by your creditworthiness.

Borrowing limits
Even if your income is high, your credit score can influence how much money you can access with a personal loan. The exact borrowing limits vary across lenders, and some may offer more (or less) insight into how they calculate borrowing limits.

As an example, Upstart says in its fine print that the amount you can borrow will be determined based on your credit, income and other information in your loan application, but "not all applicants will qualify for the full amount."

Repayment terms
Your credit score can also influence the repayment terms you're offered, meaning the timeline over which you must pay the money back. Where having a good or excellent credit score can mean qualifying for a longer repayment period or more options overall, fair credit and bad credit can limit your options dramatically.

Also note that additional factors can influence the repayment term you're offered, including your income, other debt obligations, the amount borrowed and more.

Loan fees
Individuals with good or excellent credit are most likely to qualify for personal loans with no origination fees . Everyone else will need to choose among lenders that charge these upfront fees — which can be high if your credit isn't great.

For example, Upstart targets consumers with fair or poor credit, and its loan products can come with origination fees that equal up to 12% of the loan amount.

Interest rates
Your credit score will affect the interest rate you'll pay on all types of loans. The higher your score, the lower the interest rates you're typically offered. The opposite is also true.

Lenders are fairly transparent about this fact since most publish a range of interest rates with some wording on how the rate you're offered will be based on your creditworthiness. Some lenders even list specific information on the type of borrower that can qualify for their lowest rates.

For example, Best Egg ’s fine print says you need a minimum FICO score of 700 and at least $100,000 in annual income to qualify for its lowest advertised interest rates.

Other factors that affect personal loan approvals

Your credit score will impact whether you're approved for a personal loan, as well as which lenders will even give you a chance. But it’s not the only criterion. Additional factors that can impact your ability to qualify for a personal loan include:

  • Debt-to-income ratio: Your debt-to-income (DTI) ratio shows how much you owe in regular bills compared to your income. Generally speaking, lenders like to see a debt-to-income ratio of about 40% or less before approving you for a personal loan.
  • Income: Your income will also determine how much you can borrow, or if you can even qualify for a personal loan in the first place. Some lenders publish minimum income requirements for their loan products.

» MORE: How to get a personal loan in 6 steps

How to improve your credit score to get better loan terms

Having imperfect credit when you apply for a personal loan means fewer lenders to choose from, higher interest rates and the potential for more loan fees to boot. That's why, if possible, you should strive to improve your credit score before you borrow money.

The following steps can help you give your score a much-needed boost:

  • Look over your credit reports regularly. According to credit expert Monique White of Self Financial, errors on your credit reports can severely damage your credit. To find errors and get them fixed, review your credit reports several times per year. You can do this for free on AnnualCreditReport.com.
  • Make all bill payments early or on time. Paying all your bills on time can play a huge role in boosting your credit, particularly since your payment history makes up 35% of your FICO score. Be sure to pay the full amount due each month. "If you have a mortgage, a partial payment doesn’t count – you have to make the full monthly payment for it to count as paid on time," said White.
  • Pay down existing debt. The amount you owe to debtors in relation to your available credit limits is known as your credit utilization. Since this factor makes up another 30% of FICO scores, you can help yourself by paying down existing debt. Most experts recommend keeping your credit utilization ratio below 30%.
  • Utilize all your bills and expenses. Finally, White recommends making sure all your bills are being reported to your credit history, including subscription services and utility bills. This opportunity can either be made available through your landlord or through applications like Self Financial, she says. The credit bureau Experian also offers Experian Boost to get credit for regular bills you pay.

» MORE: How to check your credit score

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    Can I get a personal loan with poor credit?

    You can get a personal loan with poor credit, but the lenders willing to approve you are limited. You'll also pay higher interest rates and loan fees, and you may qualify for a lower loan amount than you want.

    Should I improve my credit score before applying for a personal loan?

    White says having a strong credit score increases your likelihood of qualifying for and getting approved for loans, especially in what many refer to as a ‘credit crunch.’ She adds that your credit can impact how much you pay for home loans, car loans and other loans.

    With all this in mind, it makes sense to improve your credit score before applying for financing if you have that option.

    Do lenders look at my FICO or Vantage credit score?

    Lenders can use either FICO scores or VantageScore credit scores when approving applicants for a loan.

    Bottom line

    There may be no such thing as a minimum credit score for all personal loans, but you will absolutely want the best credit you can have before you apply. After all, having good or at least decent credit makes it easier to compare offers across a larger number of lenders. Good credit can also mean paying lower interest rates and loan fees (or even no loan fees), which will make borrowing less expensive overall.

    Article sources
    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
    1. Upstart, " What are the minimum credit requirements to receive a loan? " Accessed Aug. 8, 2023.
    2. LightStream, " Frequently asked questions ." Accessed Aug. 8, 2023.
    3. Avant, " How to Get a Personal Loan ." Accessed Aug. 8, 2023.
    4. FICO, " What Is a Credit Score? " Accessed Aug. 8, 2023.
    5. Upstart, " What fees am I charged? " Accessed Aug. 8, 2023.
    6. Discover, " What is Debt-to-Income Ratio? " Accessed Aug. 8, 2023.
    7. FICO, " What's in my FICO Scores? " Accessed Aug. 8, 2023.
    8. Equifax, " What Is a Credit Utilization Ratio? " Accessed Aug. 8, 2023.
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