What Credit Score Is Needed for a Personal Bank Loan?

The type of credit score you’ll need to qualify for a personal bank loan would be a good, very good, or exceptional credit score based on the FICO scoring model. Some banks or lenders may be able to lend to you even if you have a fair credit score, but that will depend on the specific bank or lender and their policies. 

The FICO scoring model is one of the most popular ways to track your credit behavior. It’s a scoring model from zero to 850, with higher scores obviously being seen as more financially responsible. The breakdown looks like this: 

  • Bad credit: 0 to 580
  • Fair credit: 580 to 669
  • Good credit: 670 to 739
  • Very good credit: 740 to 799
  • Exceptional credit: 800 to 850

It’s imperative that you check your credit score every so often so you know where you fall on the scale. This way, you know what to expect when you’re applying for credit or loans. It’s also a great way to see how much improvement you may need in order to get your credit to the good, very good, or exceptional range. 

Banks, credit unions, and other lenders are usually only willing to lend to borrowers who have exhibited good financial habits in the past. This is why they check your credit score and your credit report. Your credit report is a longer-form document that lists all of your financial activities. Your credit score is decided based on the information in your credit report.

But what do we mean when we say “good financial habits?” This includes things like making payments on time, not using your credit card too much, not having too many loans or credit cards, and not having too much outstanding debt. These are all factors that affect your credit report and credit score. 

If you’re in need of a personal bank loan and your credit score is too low, there are many ways to improve it. Start by making an effort to always pay your bills and loans on time. Next, lower how much you’re using credit cards, then focus on paying off your outstanding debts. By doing all of this, you’ll start to see your credit score improve over time.

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