What Credit Score Is Needed for a Personal Loan?

Lenders can check your credit scores when you apply for a personal loan


Ever thought about applying for a personal loan? Personal loans can sometimes be useful for making big purchases or consolidating high-interest debts. Before you take that step, it may help to understand how your credit scores could affect your loan application. 

While there might not be a minimum credit score required, your credit scores can really affect your chances for approval. That’s according to the Consumer Financial Protection Bureau (CFPB). Many popular credit scores range from 300 to 850. And when it comes to approvals, the CFPB says the higher the better. Keep reading to learn why.

Before you dig into the details of personal loans, it may help to understand some basics first. While definitions can vary, personal loans generally refer to a kind of small loan that borrowers can spend as they see fit. Many personal loans are unsecured—that means you don’t have to put down money or collateral first to be approved.

Your credit scores are just one of the factors that could impact your ability to get a personal loan. In the end, the decision is ultimately up to the lender.

Who Should Get a Personal Loan?

One of the great things about personal loans is that they can be used for lots of different expenses. Here are some common reasons why people might consider getting a personal loan: 

  • Fast cash for financial emergencies: A personal loan can be helpful when you have unexpected medical expenses, for example.
  • Consolidating high-interest debt: You might be able to consolidate some debt by combining high-interest loans into a single personal loan with a lower interest rate. The added bonus is that you’ll only need to make one monthly payment rather than multiple ones.
  • Big-ticket purchases: If you want a boat or a big-screen TV, a personal loan may be an option. A second option is to save for the item and buy it with cash. It might help to ask yourself, “Is this a need or a want?” and then make your decision from there.  
  • Home upgrades: Need to make improvements to your home’s electrical or plumbing system? A personal loan might be one way to fund those and other home upgrades.

If you apply for a personal loan, be sure you understand your interest rate and loan terms before you accept an offer. It’s also a good idea to pay attention to how much you borrow—and have a plan for paying back the loan. Talking to a financial expert for their advice can be helpful, too.

Qualifying for a Personal Loan

Let’s say you want to apply for a personal loan. How does a lender decide whether you qualify?

Credit scores could be one factor—even though meeting a lender’s minimum requirement doesn’t always mean you’ll get a loan. There’s no credit score that will guarantee approval, and all credit decisions are up to lenders.

Keep in mind that every lender’s process may be slightly different. But here are a few things that might be part of a personal loan application: 

  • Credit scores: Remember, the CFPB says a higher credit score usually makes it easier to get a loan and could also help you get a better interest rate. Factors that can affect your credit scores include your credit history, credit utilization ratio, credit mix, credit age, new credit applications and total debt.
  • Proof of employment: Lenders may want to verify that you’re employed. They might request your length of time on the job as well.
  • Proof of income: Lenders may want to verify how much income you make by requesting your pay stubs or bank statements. 
  • Debt-to-income ratio: Simply put, this is how much debt you have—what you owe—compared with how much income you have—what you earn. Your total debt might include things like student loans and car loans in addition to credit card balances.

To keep an eye on where your credit stands, you may want to check your credit report regularly. Doing so could give you an idea about your potential creditworthiness. 

With CreditWise from Capital One, you can access your free TransUnion® credit report and weekly VantageScore® 3.0 credit score anytime, without hurting your scores. CreditWise is free and available to everyone—not just Capital One customers. You can also get free copies of your credit reports from each of the three major credit bureaus at AnnualCreditReport.com.

Alternatives to Personal Loans

When you’re considering a personal loan, it can help to be aware of your other options. Alternatives to a personal loan include:

  • Credit cards: When used responsibly, a credit card can be a workable alternative to a personal loan. If you’re looking for options, you can see whether you’re pre-approved, without affecting your credit score.
  • Balance transfer: A balance transfer lets you move debt to a new or different credit card. It could help you combine your loans at a lower interest rate. But be sure you understand how it works and whether there are additional fees or restrictions.
  • Credit card cash advance: A cash advance is similar to using a debit card to get cash. But instead of the money coming from your bank account, it’s taken from your available credit. Cash advances can be convenient, but they can come with a higher interest rate than purchases you make with your credit card. You may also have to pay certain fees.
  • Peer-to-peer (P2P) lending companies: Companies that connect lenders and borrowers through online services could be another possibility. P2P lending companies might vary in how they review lenders and borrowers, including what’s required to qualify for a loan. The CFPB recommends that you make sure you understand all fees and interest charges associated with these types of loans.

Exploring Options to See What Works for You

Now you know more about credit score requirements for a personal loan. So, what’s next? 

If you decide to apply for a personal loan, keep in mind that thoroughly exploring your options can be a good thing—especially when you’re thinking about adding a new loan to your credit mix. 


Learn more about Capital One’s response to COVID-19 and resources available to customers. For information about COVID-19, head over to the Centers for Disease Control and Prevention

Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.

Monitor Your Credit for Free

Join the millions using CreditWise from Capital One.

Sign Up for CreditWise

Related Content