What Credit Score Do You Need to Get an Installment Loan?

Credit report with score on a desk

Are you considering taking out a personal loan, but feel apprehensive about your credit score? Credit scores play a large role in all different types of lending. To help you better evaluate your credit, we’ve put together a quick guide to personal loans, installment loans, and how credit ties in. Learn more about the credit score needed for personal loan borrowers below!

Is There a Difference Between Personal and Installment Loans?

An installment loan is a type of personal loan. Personal loans are given to borrowers who meet certain qualifications to be used for everything from consolidating debts to covering home repairs to paying medical bills. Installment loans are just one of many types of personal loans and are repaid over a set amount of time in a set number of payments. For example, you may agree to repay $5,000 in 32 payments of $156.25

Do Installment Loans Check Credit?

Yes, lenders check the credit scores of applicants, whether they’re applying for a personal or installment loan. Before a lender can decide whether you’re qualified to borrow, they’ll check your creditworthiness. They’ll likely conduct a hard inquiry to make sure you have a good repayment history, credit utilization ratio, and credit length history.

So, what’s the credit score needed for a personal loan? It depends on the lender and other factors. FICO credit scores can range from 300 to 850. So, if you have a credit score of 750, you’ll likely have an easier time getting approved than if your score was 580 or lower.

Why Does a Credit Score Matter?

Credit scores aren’t always the deciding factor. There are other variables at play like your debt-to-income ratio — but credit is a major influencer. If your credit report indicates you have a poor history of making payments on time, a lender will take that into consideration, and may reject your application on those grounds. Generally, credit scores of 550 and below are considered poor and can limit your borrowing opportunities.

Learn More About Your Options from Xpress Cash!

Xpress Cash has experience working with individuals with good, poor, or no credit! Even if you have bad credit, contact us at Xpress Cash to learn more about installment loans and other funding options like payday loans. We can help you figure out a financial solution that works for you from one of our three locations in Michigan, Idaho, or Wisconsin.