What Credit Score Is Needed for a Personal Loan?
When asking what credit score is needed for a personal loan, it really depends on the lending platform, lender or type of personal loan. Today we are going to simply breakout the question into understandable pieces to answer your question.
Who Are Key Lenders of Personal Loans and What Minimum Credit Score Do They Require?
Below we will breakout some key lenders and tell you what their minimum required credit score is to get approved for a personal loan.
When looking to consolidate credit cards and other higher interest debt, you may want to consider a peer-to-peer lender like Lending Club.
They offer personal loans up to $40,000 and the application process can be done completely online.
The average Lending Club borrower has a score of nearly 700. The minimum credit score to qualify is 640.
So if you have good to excellent credit and want to consolidate credit cards and debt into a lower interest rate personal loan this would be a good choice.
To apply just visit LendingClub.com
So maybe you have a lower credit score and are wanting some options. You may want to go with a lending network like PersonalLoans.com to utilize their network of lenders.
They have both banks and peer to peer lenders in their network. You just fill out one easy form and then through the platform will be connected to the one that fits you the best.
For a Bank personal loan you would need at least a 580 credit score. Another requirement is a minimum income of $3000 per month.
Now when being matched for a peer to peer loan the minimum credit score is 600+ and a verifiable minimum income of $2,000 per month.
So even if you are lower than good credit regarding your credit score, this offers an option.
When you have a credit score below 580 you may want to consider OppLoans.
The average OppLoans customer has a credit score of 560 and makes under $45K per year. This is an option if you have a low credit score.
How Can I Improve My Credit Score?
1. The main thing you can do to continually improve your credit score is to pay on time. Just one late payment can really ding your credit score.
Always make sure you are paying the minimum payments a couple days ahead of schedule to ensure you have a good onetime payment record.
2. Another key action you can take is to print out your free credit reports each year and review those for mistakes. You would be surprised to know the amount of people that check their credit reports and find small errors that impact them.
3. The other way is to review your credit score regularly and to understand the breakdown of the variables that make up your credit score.
What Factors Affect Your Credit Score?
There are some key factors that affect your credit score. Make sure you are keeping an eye on these to ensure your credit score continues to improve over time.
On time Payments – Never be late on any payments.
Your Credit Usage – use your credit responsibly.
Average Age of Your Credit – Build your credit history and don’t close older accounts or open too many new ones.
Your Total Number of Accounts
Your Credit Inquiries– Do not apply too often.
Derogatory Marks – Check your credit reports regularly to avoid false date on your reports.
Why Improving Your Credit Score is Important For Personal Loans?
As you can see that there are personal loan options for various credit scores. The key thing to remember is that when you get a personal loan it is important to be responsible as it can help improve your credit.
By being responsible and paying it on time you can have a positive impact on your credit score. This will allow you to get better rates on everything in the future. This includes your rates on credit cards, mortgage loans, auto loans and even another personal loan.
It is a great tool to consolidate debt and get your finances simplified into one regular lower rate payment. A personal loan can also be utilized in multiple other ways as a financial tool available when you need it.
Improving your credit score will allow you to get lower rates and save on interest charges over time.