5 Tips for Getting a Loan if Your Credit Score Is in the 600s

by Lyle Daly | Updated July 21, 2021 - First published on July 10, 2021

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With a credit score in the 600s, you have plenty of options for getting a loan.

If you need a loan and your credit score is in the 600s, you might be unsure about your approval odds. You don't need to worry. Depending on the exact score, the 600s fall into the fair and good credit ranges. With either of those, it's possible to get approved by quite a few lenders.

Even though you're well above the credit score you need for a personal loan, the loan process is still important. You don't want to choose the wrong lender and get denied or end up paying a higher interest rate than necessary. Follow these tips to get the loan you need at the best price.

1. Find lenders with minimum requirements you can meet

Each lender has its own minimum credit score for prospective borrowers. Some are open to borrowers with a score of 580. Others may require a score of 660, 680, or higher. By picking a lender with a minimum requirement you can meet, you're more likely to get approved.

Your FICO® Score is the type of score that matters most. It's the most widely used score by lenders, so when you want to get your credit score, aim to use a method that provides your FICO® Score.

If your credit score is in the 600s, start by looking at personal loans for fair credit. The fair credit range is from 580 to 669 under the FICO system, so you should find lenders that work for you. If your score is in the high 600s, you may even qualify for the best personal loans.

2. See if you're pre-approved

Most lenders offer online pre-approval tools. These allow you to check loan rates without affecting your credit score.

To use a pre-approval tool, you need to enter some basic information. Lenders usually want your name, address, income, desired loan amount, and Social Security number. When you submit the form, the lender runs a soft credit check on you. Then it will let you know whether you're pre-approved for a loan. If so, it will provide the amount and interest rate you could get.

A personal loan pre-approval isn't a guarantee. But it gives you an idea of which lenders will approve you and what kind of rates you can get with each one.

3. Look for a cosigner

A cosigner is someone who agrees to take responsibility for a loan with you. Because of that, the lender can use the cosigner's information to decide if it will approve the application and what type of rate it will offer.

Applying for a personal loan with a cosigner who has a higher credit score than you could help you get a larger loan, a lower interest rate, or both. The challenge is finding a person to do this for you. The cosigner is taking a risk, as they'll be just as responsible for the loan as you are. If you get a loan with a cosigner, make sure to always pay on time to avoid hurting both your credit scores.

4. Pay down credit card balances before you apply

Boosting your credit score before applying for a loan can make a big difference. Even a small increase could help you get a good interest rate that saves you hundreds of dollars.

A fast way to increase your credit score is by paying down any credit card balances you have. This is because of a factor called your credit utilization ratio, or the ratio of your card balances to your credit limits. For a healthy credit score, it's good to keep this ratio under 30%. So, for every $1,000 of credit you have, use no more than $300.

The nice thing about credit utilization is that only the current number matters. Let's say you have a credit utilization of 70%. If you pay that down to 25%, your credit score would go up within a month when the credit card companies report your new balances.

5. Watch out for predatory lenders

Unfortunately, there's no shortage of predatory loan offers out there. Lenders offering payday loans and car title loans are two examples. They often charge extremely high interest rates, with lenders in some states charging APRs over 500%. The reason they're able to attract consumers is because they have fewer minimum requirements. Some will approve borrowers without even checking their credit scores.

Research any lender you're considering to see if it's reputable. Before you agree to a loan, review the contract, including the repayment terms and the interest rate. If the cost of the loan will make it nearly impossible to pay back, keep looking around for other options.

A credit score in the 600s is enough to qualify for a loan. Try to pay down balances on any credit cards to get your credit score as high as possible before you apply, or see if you can find a cosigner to help you out. After that, it's just a matter of comparing your options and getting the amount you need at the best possible rate.

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