Therefore, availing of a personal loan with a CIBIL Score of 550 is difficult. However, individuals can improve their chances of getting a loan under such circ*mstances by following some simple tips. Before that, they need to know the required CIBIL Score for a personal loan.
CIBIL Score for personal loans
Most financial institutions ask for a credit score or CIBIL Score of 685 or higher before approving a personal loan.In some cases, lenders sanction a personal loan with a low CIBIL Score only if the borrower can meet/ exceed other eligibility parameters.
Since a CIBIL Score denotes the creditworthiness of an individual, lenders often do not offer a personal loan if the CIBIL Score is less. A low CIBIL Score has the following repercussions in terms of opting for a personal loan:
- Higher interest rates
- Reduced sanctioned amount
- Greater chances of loan application rejection
Thus, even though some lenders may sanction a personal loan for a CIBIL score of 650, borrowers can face the issues mentioned above.
Read More: Importance of CIBIL Score For A Personal Loan
However, to improve this score and boost the eligibility and leverage the unique features of this credit, one must know the factors that pull down this score.
Factors responsible for a low credit score
The most convenient way to detect a poor CIBIL Score is by going through the credit report meticulously. It will help individuals point out discrepancies, if any.
The following are the factors that contribute to the CIBIL Score:
- The repayment history forms 35% of the credit score.
- The credit utilisation ratio constitutes 30% of this score.
- The healthy mixture of credits also decides 10% of the CIBIL score.
- Duration of credit availed makes up 15% of credit score.
- Credit inquiries constitute the rest 10% of the CIBIL rating.
By knowing these factors, individuals can work towards improving this score to a great extent.
How to improve your CIBIL Score if it is just 550?
It is possible for a lender not to approve a personal loan for a CIBIL Score of 550. Hence, it is imperative to follow the tips mentioned below to improve this score:
- Pay the credit card bills on time and in full.
- Clear the existing debts beforehand.
- Avoid applying for multiple credits simultaneously.
- Maintain a credit utilisation ratio below 30%.
- Keep the old account details to make the credit history lengthy.
- Check the credit report at least twice a year.
- Raise a query immediately in case any information on your CIBIL report is incorrect.
Bajaj Finserv allows customers to check their credit scores through its website. It also offers easy-to-meet eligibility criteria for personal loan and an affordablepersonal loan interest rate. So, it is clear that getting approval for a personal loan with a CIBIL Score of 550 is challenging, regardless of whether other eligibility criteria are met entirely or not. Thus, it is wiser to adopt positive financial habits to improve this score and overall eligibility.
FAQs
Though it may be more challenging to find a lender that's willing to work with you, it is indeed possible to obtain a loan with a credit score of 550. Most lenders require a minimum credit score of between 600 and 650, but some lenders specialize in personal loans for those with lower scores.
How big of a personal loan can I get with a 550 credit score? ›
Best Personal Loans for a 550 Credit Score
| Lender | Loan Amounts | APRs |
|---|
| Upstart | $1,000 - $50,000 | 6.4% - 35.99% |
| Oportun | $300 - $18,500 | 10.07% - 35.95% |
| OneMain Financial | $1,500 - $20,000 | 18% - 35.99% |
| RISE | $500 - $5,000 | 60% - 299% |
1 more rowAug 26, 2022
Many give preference to borrowers with good or excellent credit scores (690 and above), but some lenders accept borrowers with bad credit (a score below 630). The typical minimum credit score to qualify for a personal loan is 560 to 660, according to lenders surveyed by NerdWallet.
How much of a personal loan can I get with a credit score of 600? ›
With FICO, fair or good credit scores fall within the ranges of 580 to 739, and with VantageScore, fair or good ranges between 601 to 780. Many personal loan lenders offer amounts starting around $3,000 to $5,000, but with Upgrade, you can apply for as little as $1,000 (and as much as $50,000).
What can a 550 credit score get you? ›
Credit Rating: 550 is considered a bad credit score. Borrowing Options: Most borrowing options are available, but the terms are unlikely to be attractive. For example, you could borrow a small amount with certain unsecured credit cards or a personal loan with no credit check, but the interest rate is likely to be high.
How to get a $10,000 loan with 550 credit score? ›
If you have a low credit score, it may be easier to qualify for a loan from online lenders specializing in bad credit or payday loans. These lenders may be more lenient in their approval criteria, but it's essential to be cautious, as they often charge significantly higher interest rates and fees.
What credit score do you need to get a $30000 loan? ›
In general, lenders extend $30,000 loans to borrowers with good to excellent credit, which is typically 670 and higher. But there may be lenders who lend to borrowers with bad credit.
What credit score do you need for a $20000 personal loan? ›
Requirements for a $20,000 Personal Loan
Requirements vary by lender, but most lenders require borrowers to have a credit score in the good to excellent range — meaning a score of at least 670.
What credit score do I need for a $10000 personal loan? ›
Requirements will vary across lenders. However, qualifying for a $10,000 personal loan typically requires a credit score that exceeds 640, an active checking account, and a steady, verifiable income, among other factors.
What credit score do I need for a $40000 loan? ›
$40,000 loan FAQ
In general, you'll want to have a credit score of at least 670 and a DTI ratio below 35% to qualify and get good rates.
Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.
How much of a loan can I get with a 560 credit score? ›
You can borrow anywhere from a few thousand dollars to $100,000+ with a 560 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
Can I borrow money with a 500 credit score? ›
However, borrowers with 500 credit scores will have a better chance of approval with the following loan types: Secured personal loans: Secured personal loans require you to pledge collateral, such as a vehicle, savings account, collectible, piece of jewelry, or even the fixtures in your home.
How long does it take to go from 550 to 600 credit score? ›
For instance, going from a poor credit score of around 500 to a fair credit score (in the 580-669 range) takes around 12 to 18 months of responsible credit use. Once you've made it to the good credit zone (670-739), don't expect your credit to continue rising as steadily.
What is a 550 to 600 credit score? ›
Most credit scores range from 300 to 850, and lenders tend to look at scores in the 500 to 600 range as less than ideal.
Is 550 a bad FICO score? ›
Your score falls within the range of scores, from 300 to 579, considered Very Poor. A 550 FICO® Score is significantly below the average credit score. Many lenders choose not to do business with borrowers whose scores fall in the Very Poor range, on grounds they have unfavorable credit.
Can you get a personal loan with 550? ›
If you have strong credit, you likely have a better shot of qualifying for a personal loan with lower rates and more favorable repayment terms. But if you have a poor credit score of 550 or lower, you may have a more challenging time getting approved. However, it is possible.
What credit score do I need for a $60000 personal loan? ›
Know your credit history: Because $60,000 is such a large sum of money and there are fewer lenders that offer such large loans, you'll find it's harder to qualify for. You'll typically need good or excellent credit (a FICO score of 670 or higher) and may need to meet certain income requirements.
