You need a credit score of at least 580 to qualify for a decent installment loan from a major lender. You will likely need a higher score to get a personal installment loan with no origination fee and a low APR, however.
Other types of installment loans will have different requirements than personal loans. For example, you may be able to get a mortgage or a car loan with a low credit score or no credit history.
Credit Score Required for Personal Installment Loans by Lender
You’re not guaranteed to get approved for an installment loan just because you meet the credit score requirement. You’ll also need to be at least 18 years old, have enough income to make monthly payments and have a bank account.
To see which lenders may approve you and what rates may be available to you, check out the free pre-qualification tool on WalletHub.
No, you do not need good credit for an installment loan. In general, you need a credit score of at least 580 to get approved for a personal installment loan, which means that even people with bad credit scores have a chance of getting approved.
Keep in mind that other types of installment loans have different credit score requirements. For example, car loans generally don’t have a minimum credit score requirement, conventional mortgages have a recommended credit score of 620, and most federal student loans have no requirement since they do not perform a … read full answerhard credit inquiry.
For your convenience, below is a comparison of the best personal installment loans for applicants with bad-to-fair credit. This comparison focuses on personal loans because they are most commonly associated with the term “installment loan.”
Upstart Disclosure: Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000), NM ($5,100), OH ($6,000).
The full range of available rates varies by state. The average 5-year loan offered across all lenders using the Upstart platform will have an APR of 24.83% and 60 monthly payments of $26.36 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $15,817 including a $594 origination fee. APR is calculated based on 5-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
The fastest ways to improve your credit score are to pay down your balances, dispute incorrect information on your credit report, make more frequent payments, and reduce credit utilization. Credit utilization (how much of your credit limits you use each month) contributes to a portion of your credit score that accounts for 20% - 30% of your overall score. So, an adjustment there can result in a big credit boost pretty quickly. Similarly, you can dispute incorrect information with a quick online request or phone call. You won’t always get an immediate credit score increase, but correcting errors on your credit report is a great place to start.… read full answer
There are a few other ways to increase your credit score quickly, from becoming an authorized user to increasing your credit limit. They may not all be equally effective for everyone, as it can take years to build a consistently good or excellent credit score. In fact, some strategies could send your credit score in the wrong direction before leading to an increase. For example, requesting a credit limit increase can result in a hard inquiry that damages your credit a bit in the short-term, but having more credit available could produce long-term gains if used responsibly.
Here’s how to improve your credit score fast:
Pay down your balances. If you aren’t eligible for a credit limit increase, focus on paying down existing debt. Paying down a large chunk of debt at once will help your credit utilization ratio and bump up your score. If you can’t make a large payment all at once, try to pay more than just the minimum monthly amount. If you have multiple debts, start by making payments on the debt that has the highest interest rate so you can limit interest charges.
Dispute incorrect information on your credit report. You should file a dispute for any incorrect negative info on your report. Once the dispute goes through, incorrect items will drop off your file, and your score should improve. You may have to wait 30 days for the credit bureau to review your dispute before you see any changes.
Make more frequent payments. Credit utilization is calculated based on the statement balance on each of your credit cards. You can reduce these balances, thus decreasing your credit utilization and increasing your credit score, by making payments before the end of each billing period. Then, pay off the remaining balance by the due date to avoid interest charges and credit-score damage.
Become an authorized user. If you’re just starting out, or your credit report has a string of negative marks, a good move would be to become an authorized user on someone else’s credit card and build your credit over time. Just make sure the primary holder is responsible and pays their bills on time.
Add new payments to your credit file. There are new services that can add positive information, like on-time utility payments, rent payments, and positive bank balances to your credit report. Not all of these programs apply to all credit bureaus, and some cost money to utilize, but they could boost your credit score over a few months.
Increase your credit limit. A higher credit limit can reduce your credit utilization ratio, assuming your spending does not increase. The only potential problem is that asking for a credit limit increase usually results in a hard credit inquiry, which would temporarily hurt your credit score a bit. But if you get a credit limit increase without asking, or you have a few months before you need the highest credit score possible, a higher limit could definitely help.
Everyone’s credit situation is different, so not every option will be relevant or available to you. The best way to find out exactly what you can do to quickly improve your score is to check out the personalized advice in the Credit Analysis section of your WalletHub dashboard.
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