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Here Are the Credit Scores You Need for Different Types of Loans

There are many different types of loans, but you only have one credit score. Knowing what you qualify for and what your credit score goal should be can be confusing.
You can save a lot of money by raising your credit score a few points. We found out the minimum requirement for the most popular types of loans and what score you should be aiming for to have the best chance at being approved and getting a great rate.

Auto Loan

You can get a car loan with any credit score, but borrowers with scores below 500 can pay up to five times more for a new car than someone with a score of 781.
The average credit score of people who purchase new cars is 714, and for those purchasing used cars it’s 655. If you’re looking to buy a car, your goal is to be a “prime borrower.” You’ve probably heard the term “subprime loan” — those are loans given to people with subprime credit scores, or those below 600. Prime borrowers have a credit score of at least 661, more easily qualify for auto loans and get the most reasonable interest rates.

Student Loan Refinancing

While you can take out hundreds of thousands of dollars in student loans without so much as a credit check, you do need a good credit score to refinance them. SoFi, a popular refinancing lender, requires a minimum score of 650, but scores above 700 have the best bet of being approved.


The minimum credit score needed for conventional and VA loans is 620. Conventional mortgages offer the lowest fees and best interest rates. For the best rates, you’ll need a credit score of 740 or higher.
For those with lower credit scores, the minimum credit score you need to get an FHA loan is 500, but even that is difficult. FHA loans require at least a 10% down payment if you have a 500 credit score and 3.5% down if your score is above 580.
Buyers with credit scores under 620 will see rates 1% higher than lowest advertised rates, and buyers with scores under 580 can expect rates 2% higher. When buying a home, it’s best to improve your credit score to at least 620 to take advantage of good rates or 750 to be competitive.

Personal Loan

The minimum to qualify for some personal loans is 550, but borrowers getting a personal loan with a credit score less than 620 can expect to have an interest rate upwards of 17.99%. Borrowers with credit scores of over 700 can get rates around 10%, but only borrowers with super prime scores of 780 and above will see interest rates under 5%.   You can also check out to see what you may qualify for.

Small Business Loan

It takes more than a good personal credit score to qualify for a small business loan — the business needs good credit, too. Business credit scores generally range from 0 to 100. Your business will need a credit score around 75, while you’ll need a score of at least 640, preferably closer to 700.

Tips for Raising Your Credit Scores

  • Put loans and debt payments on automatic payments to prevent late payments.
  • Obtain a secured credit card to use for small purchases like gas and groceries.
  • Pay down your debt weekly or biweekly instead of just monthly
  • Negotiate outstanding debts in collection, pay them off in one lump sum and get documentation that the debt is settled
  • Become an authorized user on the credit card of someone who has a high credit score​

Take a look at our recommended cards to help you rebuild credit.
Whatever your goals are, being financially responsible goes far beyond your credit score. When you take on a loan, be sure that you can pay it off in a timely manner to avoid lowering your credit score and your quality of life.

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