What kind of credit score to get a loan

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Experian websites have been designed to support modern, up-to-date internet browsers. Try not to fall behind on paying bills. Check that the info on your credit reports is correct. Request a copy of each of your credit reports and contact the credit bureaus if you find any mistakes. Before finalizing a personal loan, compare common fees and costs. Consider how taking out a personal loan will affect your credit. For example, making payments on time can help build your payment history, which may improve your credit scores.

On the other hand, taking out a new loan may increase your total debt — which may bring your scores down. Use a credit score simulator to explore how these factors could affect your scores and to estimate how your scores are likely to change after you take out a loan.

Finally, before applying, gather the information you need for the application process. That said, even if your credit score is less than perfect, you have options. It's a good idea to get your score as high as possible before you apply for a personal loan. Remember, the higher the credit score for a personal loan, the more likely it is your lender will approve a low interest rate.

The fastest way to raise your credit is paying off debt. You can also check for errors on your credit report. The three credit bureaus -- Equifax, Experian, and TransUnion -- are each legally required to provide you with one free copy of your credit report per year upon request.

Read through your credit reports, and if you find a mistake, notify the credit bureau that issued the report. There are lenders that offer personal loans for borrowers with low credit. If your credit score is below , you're considered either "fair credit" or "poor credit":.

Even the best personal loan for bad credit will come with a relatively high interest rate, but paying off your personal loan will raise your credit score. So the next time you need to borrow, your credit score should be in a higher range and you will likely qualify for better personal loan interest rates.

You can compare personal loans by getting prequalified with several lenders. When you get prequalified with a personal loan lender, the lender shows you what kind of rates and terms you could qualify for based on your specific situation.

This won't have an impact on your credit score. Once you fill out a personal loan application, a lender will examine your credit history to determine how likely you are to repay the loan. In addition to checking your payment history, they will check your credit utilization ratio. Credit utilization is calculated by dividing your monthly debt by your income.

Here's why that matters: The lower your credit utilization, the more comfortable lenders are about granting loan approval. When you prequalify with multiple lenders, you can also compare fees. For example, one lender might offer a lower interest rate -- but charge a hefty origination fee. Pay attention to annual percentage rates APRs of different loans: The APR of a loan combines interest rate with fees to give you the true cost of a loan.

Getting all the details ahead of time empowers you to go with the personal loan option that costs the least overall. Once you've compared rates this way, you'll know exactly which lender to choose so that you get the best terms on your loan.

If you have a personal loan cosigner , that person's financial information and credit score could help you to qualify for a loan or receive better terms than you would on your own. That's because your cosigner will have the same level of responsibility as you on the loan. This is an excellent way to get a good interest rate and attractive loan term, even if your credit score for a personal loan is low. One final option is to take out a secured loan against an asset where you've built up equity.

Here are a few such options:. With a secured loan, you risk whatever you use as collateral. For example, with HELOCs and auto equity loans, you're putting your home or your car at risk should you default. Only take out a secured personal loan if you're confident you can make the monthly payment on time. For example, if you lose your job and can't pay the loan back within five years, the loan could be considered a distribution. There are certain types of personal loans that don't require a credit check.

Payday loans and car title loans are two common examples. You could get one of these no matter your credit score. No-credit-check loans are a poor choice in all but the most desperate of situations. And even then, it's best to consider other options, like a loan from a family member or getting a loan with a cosigner.

Even if you don't have a good credit score, avoid getting a payday loan or other no credit-check loan at all costs. There's an unsecured personal loan available for just about every credit score and even some that don't require a credit check at all. The minimum credit score for a personal loan varies depending on the lender -- and that means you have options. If you absolutely need a loan, you can probably get one. Your credit score will, however, determine the loan options available to you and how much interest you end up paying.

For that reason, it's in your best interest to work on your credit score as much as you can and then shop around for the best low interest personal loans. Every bit of progress you make toward achieving the highest possible credit score for a personal loan will open up more options for personal loan providers -- and potentially help you qualify for lower interest rates.

That can make a big difference in how much you pay in total for your loan, especially if you need to borrow a large amount of money.