What Credit Score Do You Need for a Personal Loan?

Written by Kim PinnelliReviewed by Nathan Brown, CFP®Updated: 4th May 2022
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If you’re in the market for a personal loan, you likely want to know what credit score you need to qualify. While there isn’t a one-size-fits-all answer, we show you want lenders look for and how they determine if you’ll qualify for a personal loan below.

What Credit Score Is Good Enough for a Personal Loan?

Every lender has different credit score requirements for a personal loan. On average, though, expect to need at least a 640-credit score to qualify.

Here’s why.

When you take out a personal loan, you don’t put up collateral. This means if you default on the loan, the lender doesn’t have anything to fall back on to get the money you owe. They can send your debt to a collection agency or sue you, but both cost money that they typically don’t want to spend.

Some personal loan lenders require an even higher credit score to ensure that you are a good candidate and won’t default.

>> More: Compare the Best Personal Loans

Qualifying for a Personal Loan: Factors that Matter

When applying for a personal loan, lenders look at many factors, including your credit score. Here’s what to consider.

  • Credit Score: As we said, you’ll need at least a 640-credit score to qualify. Most lenders require a higher score unless you have compensating factors like a low debt-to-income ratio, a large amount of assets, or a co-signer.
  • Credit History: Your credit history tells lenders how you handle your finances. Do you pay your loans on time? Do you borrow more than you can afford? Are there a lot of inquiries on your credit report? These are things lenders look at to decide if you’re a good risk for a personal loan.
  • Free Cash Flow: Lenders like to know that you have enough disposable income each month. This means you have money to spend how you want and won’t feel restricted when something unexpected happens. If you don’t have a lot of free cash flow, they may be wary about lending you money.
  • Debt-to-Income Ratio: Your DTI compares your monthly debts to your gross monthly income (income before taxes). The lower your DTI is, the less risk of default you are, so it’s easier to qualify for a loan. At the most, your DTI should be 43%, but lower is always better.

What Is the Minimum Credit Score for a Personal Loan?

Some lenders allow credit scoresbelow 640 with other compensating factors or at higher interest rates than normal, but most want a credit score of at least 640. Before applying for a personal loan, find out the minimum credit score required.

Personal Loan Minimum Credit Score Requirements by Lender

LenderMin. Credit Score
SoFi680
LightStream680
Marcus660
Discover660
OneMain Financial660
Best Egg640
Payoff640
LendingClub600
Rocket Loans 580
Avant580
Upgrade560
UpstartVaries

If you’re shopping around and just getting rates, it won’t affect your credit score since most lenders just do a soft credit pull. This gives you the chance to see which lenders would lend you the money you need and at what cost. Once you choose a lender and formally apply for the loan, then they would do a hard credit pull which puts an inquiry on your credit report.

Can You Get a Personal Loan with Fair or Bad Credit?

You can get a personal loan with fair or bad credit, but don’t expect the best terms. You’ll likely pay a higher interest rate, higher loan origination fee, and have more demanding payment terms. Look at the big picture and see how much the loan costs overall before deciding if it’s a smart financial choice.

Tips for Getting the Credit Score You Need for a Personal Loan

Try these tips to increase your credit score to get a personal loan versus subjecting yourself to a payday loan or credit card cash advance.

  • Bring your payments current – If you have any late payments reported on your credit report, bring them current right away, and then keep making your payments on time moving forward. Your payment history is the largest part of your credit score.
  • Pay your debts down – Your credit utilization rate is another factor in your credit score. If you have over 30% of your credit lines outstanding, you hurt your credit score. Pay your credit card balances down as much as possible to increase your credit score.
  • Limit your inquiries – Each time you apply for a loan, it makes an inquiry on your credit report. Each inquiry is worth 5 points, and too many inquiries can damage your credit score considerably. Don’t apply for new loans or credit unless you absolutely need it.

What Credit Score Is Needed for a $1,000 Loan?

Borrowing just $1,000 isn’t risky for lenders, so they’ll be more lenient when it comes to credit scores. If you have a credit score lower than 640, you might still get approved because the loan term will be short, and the risk is small. Upgrade, Upstart, and LendingPointoffer loans starting at $1,000.

What Credit Score Is Needed for a $10,000 Personal Loan?

As you increase your loan amount, lenders want a higher credit score to ensure you won’t default. A $10,000 personal loan isn’t the highest loan amount most lenders will offer, so they may let you get by with a mediocre credit score but expect lenders to want at least a 640 at this loan amount.

What Credit Score Is Needed for a $20,000 Personal Loan?

A $20,000 loan amount is usually the most lenders will allow for a personal loan, and the amount they require the highest credit score. Don’t be surprised if you see lenders requiring credit scores of 700 or higher to secure a personal loan of this amount.

Bottom Line: What Credit Score Do You Need for a Personal Loan?

Regardless of how much money you must borrow, always aim for the highest credit score. Even when a lender allows lower credit scores, you’ll get worse terms on the loan and pay more interest if you pose a high risk of default. Keep your credit score high, and you’ll get the most attractive loan terms.

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Kim Pinnelli
Kim Pinnelli

Kim Pinnelli is a Senior Writer, Editor, & Product Analyst with a Bachelor’s Degree in Finance from the University of Illinois at Chicago. She has been a professional financial writer for over 15 years, and has appeared in a myriad of industry leading financial media outlets. Leveraging her personal experience, Kim is committed to helping people take charge of their personal finances and make simple financial decisions.