Soccer balls in goals

What Credit Score Do You Need for a Personal Loan?

Wondering About
Personal Loan
Interest Rates?

Apply online with Rocket LoansSM and instantly see what you prequalify for. No hidden fees, and same-day funding is available.

Explore your mortgage options

NMLS #3030

*Connect with a mortgage specialist

We teamed up with Rocket Mortgage to help you get house-hunting sooner. Answer a few questions and an agent will reach out to discuss your options.

Get Started by selecting an option below

What kind of loan are you interested in?

What to expect

Tell us what you need and a representative from Rocket Mortgage will give you a call. You’ll have support at every step.

What kind of property do you want to purchase? What kind of property do you own?

Why we’re asking

Rocket Mortgage® can provide a more accurate rate estimate if they know what kind of property you’re interested in.

NMLS #3030
How do you use your property? How would you use this property?

Why we’re asking

Having a little more information upfront helps Rocket Mortgage® provide a personalized rate faster.

NMLS #3030
When are you planning to buy?

Still House Hunting?

Hope you find your dream home soon! In the meantime, it’s never too early to know your rate.

NMLS #3030
Are you a first-time home buyer?

It’s all good:

Whether it’s your first – or second property – Rocket Mortgage® can provide you with a rate estimate.

NMLS #3030
Do you have a second mortgage?

It’s all good

If you have a second mortgage, it’s no problem. Letting us know helps to customize your rate.

NMLS #3030
What is your credit score?

Don’t know your score?

Don’t sweat it! Make your best guess. Credit scores range from 300 (low) to 850 (excellent).

NMLS #3030

Tell us a bit more about you

What happens next?

A representative from Rocket Mortgage® will be in touch to discuss your commitment-free, personalized rate. Then you can decide whether you’d like to lock it in!

NMLS #3030

Enter your contact info so Rocket Mortgage® can get in touch!

By providing your contact information and clicking the "Agree & Send Information" button below, you agree to our Terms of Use and Privacy Policy. You also expressly consent by electronic signature to receive telephonic sales, promotional, marketing and other calls and text messages, including any calls and messages sent by any automated system or other means for the selection or dialing of telephone numbers, or using an artificial or prerecorded voice message when a connection is completed, from Rocket Mortgage, its Family of Companies, our partner companies and our marketing partners at the telephone number you have provided, even if that telephone number is on a corporate, state, or national do-not-call list or registry. Your consent and agreement to receive such calls or text messages is not a condition of purchasing any property, goods or services from us, our Family of Companies or any of our partners.

NMLS #3030

To qualify for a personal loan, most lenders are looking for borrowers with credit scores in the neighborhood of 670. That doesn’t mean you can’t qualify with a lower credit score, but it may affect how much you can borrow and the interest rate you’ll be charged.

To make sure you’re getting the most value from a personal loan, it’s important to understand what a personal loan is and how your credit score can affect your ability to get one.

Get Cash Fast

Rocket LoansSM offers same-day funding for personal loans. Get prequalified and get the cash you need, fast.

What Is a Personal Loan?

A personal loan lets you borrow a lump sum of money upfront from a lender (like a bank, credit union or online lender). You pay back the loan by making regular monthly payments (aka installments) over a fixed period of time.

You can use the loan money for a few different reasons. But, the most common reasons for taking out personal loans are debt consolidation, paying off high-interest credit card balances or emergency loans.

Loan components

When you’re shopping for a personal loan, you’ll want to consider these variables as you compare offers:

  • Interest: The amount the lender charges you to borrow money, usually represented as a percentage.
  • Fees: They are additional costs to borrow money. Fees can include a loan origination fee that’s added to your balance upfront or an annual fee that’s added to your loan balance each year. If you pay off your loan ahead of schedule, you may be charged a prepayment penalty, so check with your lender about possible prepayment charges. 
  • Annual percentage rate (APR): When lenders list their loans, they’ll usually list the APR. The APR includes the annual cost of both the interest and the fees on the loan. It’s helpful because it gives you a sense of the cost of the loan beyond the interest rate. 
  • Repayment term: It’s the length of time you have to pay off the loan, usually ranging from 24 – 84 months (2 – 7 years). A longer loan term can reduce your monthly payment but increase your interest rate, increasing the amount you’ll pay in interest over the life of the loan. 

What Is Your Credit Score and How Does It Affect Your Personal Loan?

Your credit score is a number between 300 – 850 that lenders use to measure your creditworthiness. The higher your score, the better your credit.

When you apply for a personal loan, the lender checks your credit score and uses it to determine if you qualify for the loan. 

If you qualify, the lender will also use your credit score to decide what interest rate they’ll charge and how much they’ll lend you.

Interest rates

To help you get a sense of how your credit score might affect your interest rate, here’s a helpful breakdown using the FICO® credit score model.

Credit Score Range (FICO®)[1]Anticipated Interest Rate
300 – 579 (Poor)It may be hard to qualify for a personal loan.
If you do qualify, expect to pay interest rates of 25% or higher.
580 – 669 (Fair)You can probably qualify for a personal loan.
Expect interest rates higher than 15%.
670 – 739 (Good)You’ve got a great chance of qualifying for a personal loan.
Expect interest rates of 9% or higher.
740+ (Very Good/Excellent)Congrats! You have excellent credit. 
Lenders will offer their most competitive rates, usually 5% or higher.

Every lender has its own criteria, so these ranges aren’t exact. Lenders will also consider your income and other factors when determining what interest rates they can offer.

Loan amount

Your credit score can also affect the amount of your personal loan. 

Personal loan amounts tend to start around $1,000 – $5,000 and can go as high as $100,000. 

Even if a lender advertises that they can lend up to $100,000, there’s no guarantee that you’ll qualify for that much. The amount you’ll be able to borrow will depend on your credit score and other considerations, like your income, your debt-to-income (DTI) ratio and your financial history.

What Goes Into My Credit Score and How Can I Improve It?

Understanding the effect your credit score can have on your ability to get a personal loan, you may be wondering what to do if your credit score is hovering at the lower end of the spectrum.

The first things first: get to know the credit bureaus. Your score is reported by one of three credit bureaus: Equifax®, Experian™ or TransUnion®. Each bureau has its own formula to calculate your credit score, but these are the biggest factors all three bureaus take into consideration: 

Payment history

What is it? It tracks how consistently you pay your bills on time. This includes everything from your credit card to your student loans and utility bills. A single late payment can stay on your credit report for up to 7 years.[3]

How can I improve it? Avoid late payments. If you can, use autopay to make sure your bills are always paid on time. You usually have a 30-day grace period before a late payment shows up on your credit report, so try to pay the bill as soon as possible. 

Credit utilization ratio

What is it? It’s a fancy-sounding term that measures how much you owe versus how much you can borrow. If your credit card balances are consistently close to your credit limits, chances are your credit utilization ratio is high.

How can I improve it? Paying down your balances will improve this number. You can also try and get added to the credit card account of a family member with better credit.

Credit history and credit mix

What is it? Lenders want to see that you have a history of using credit responsibly, as well as the ability to handle different types of credit and multiple lines of credit. They want to see that you make timely payments and aren’t overusing your credit.

How can I improve it? Avoid taking out too many loans or racking up too much credit card debt in a short period of time. If you’ve always relied on credit cards, and don’t plan on buying a car or home, a personal loan can help diversify your credit portfolio.

What if I Have Bad (or No) Credit and Need To Get a Personal Loan Quickly?

If you don’t have the time you’ll need to improve your credit score before talking to a personal loan provider, there are options available. Just be prepared for higher interest rates when you borrow.

Bad-credit loan

These unsecured personal loans are designed to help borrowers with credit scores between 300 and the low 600s. 

Not every lender offers these loans, and you can expect to pay more in fees and interest if you get one. 

Interest rates on bad-credit loans can easily go as high as 36%. While this may be a necessary short-term solution, you’ll want to look for ways to pay off the loan as quickly as possible. 

If you plan on paying off the loan early, remember to check the loan’s terms. Make sure the lender won’t charge you an early repayment penalty.

Credit-builder loan

Sometimes called “fresh start loans” or “starting over loans,” credit-builder loans are secured personal loans designed to help people looking to build a credit history or improve their credit scores.

With these loans, you deposit money into a bank account that is held by the lender. After each payment, more of the money in the account is “unlocked” and becomes available to you. When the loan is paid back, you get the entire amount you deposited back.

Your monthly payments are reported to the three major credit bureaus, and that can help you build your credit history.

Heads up: These loans aren’t widely advertised by lenders, so you’ll have to ask for them. 

Co-signed loan

Another way to get better terms on a personal loan is to have someone with better credit co-sign the loan with you. Given the co-signer’s good credit and credit history, a lender is more likely to approve you with a co-signer. 

A co-signer agrees to pay back the loan if you can’t. So, make sure you and your co-signer understand what’s expected from both of you. After all, if you miss a payment, it could hurt your co-signer’s credit as well.

Getting the Right Personal Loan for Your Credit Score

If you need money quickly, anticipate a big future expense or want to take control of your higher-interest debt, a personal loan can be a powerful solution. 

Check your credit score before you talk to a lender. It can help you figure out which loans are available to you. 

If you think your score isn’t where it needs to be, with a little work, you can improve it to get a more affordable personal loan now or in the future.

Ready for a Personal Loan?

Applying through Rocket LoansSM is fast and easy.

Checking your options won’t affect your credit score.

The Short Version

  • Lenders will use your credit score to determine whether you qualify for a personal loan, the amount they’ll lend and the interest they’ll charge
  • To qualify for lower interest rates and better loan terms, you’ll need a minimum credit score somewhere in the high 600s
  • If you have a lower credit score, you may qualify for a personal loan, but you’ll probably have to pay more in interest
Back to top of page

  1. myFICO®. “What is a Credit Score?” Retrieved September 2021 from https://www.myfico.com/credit-education/credit-scores

  2. Experian™. “Growth of Personal Loan Debt Slows Amid Pandemic.” Retrieved September 2021 from https://www.experian.com/blogs/ask-experian/research/personal-loan-study/

  3. Equifax®. “When Late Payments Show on Credit Reports.” Retrieved December 2021 from https://www.equifax.com/personal/education/credit/report/when-late-credit-card-payments-post/

  4. Experian™. “2020 Consumer Credit Review.” Retrieved September 2021 from https://www.experian.com/blogs/ask-experian/consumer-credit-review/

You Should Also Check Out…

Our team of financial experts write, review and verify content for accuracy and clarity.