How to take out a fair credit loan today

Fair credit scores may not be perfect, but they shouldn’t prevent you from getting a personal loan. And you have many ways to improve your chances of qualifying.

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If you have a fair credit score, you may still be able to qualify for a personal loan. Here’s what you need to know about fair credit loans. (Shutterstock)

Fair credit scores are pretty common. Just over 9% of Americans had credit scores between 600 and 649 as of April 2021 — the heart of the fair credit range, according to credit-scoring model FICO. And nearly 20% had scores slightly above or below that range.

While these scores are far from perfect, it doesn’t mean lenders won’t work with you. In fact, if you have a fair credit score, it’s still possible to get a personal loan — and you can even take some steps to improve your chances of getting one. 

Where to get a fair credit loan

Many financial institutions will lend to borrowers with fair credit. Here are a few options to consider.

Online lenders

Online lenders can be a good option for those with fair credit scores, as they often have more lenient eligibility requirements. Most online personal loan lenders allow you to check rates and apply for a loan with just a quick form on their website. And they typically offer fast loan funding, sometimes as soon as the same or next day after approval.

Credible makes it easy to compare personal loan rates from various lenders, all in one place.

Credit unions

You can also consider credit unions for your personal loan. Because they’re smaller, local institutions, they often have more leeway with what products, fees, and rates they can offer. You’ll likely have to become a credit union member to qualify (though doing so could give you a discount or lower rate). 


Big banks are another option for personal loans, and they may offer higher loan amounts than other options. Your bank may even be a good choice, since you have an established relationship with them. They may offer you perks or a better interest rate to reward you for your loyalty. 

What is fair credit?

The fair credit range of the FICO scoring model spans from 580 to 669. It’s the second-lowest tier of credit score ranges, with poor credit scores — or those under 580 — being the lowest. The average credit score of a U.S. consumer is 716, according to FICO.

Here’s a look at the FICO Score ranges: 

  • 579 and below: Poor
  • 580 to 669: Fair
  • 670 to 739: Good
  • 740 to 799: Very good
  • 800 and above: Exceptional

Despite being on the lower end of the credit score spectrum, FICO says that many lenders will approve loans with lower scores. PenFed Credit Union, for example, requires a score of just 580 for personal loans.

Just keep in mind that you may receive a higher interest rate than borrowers with higher scores. Lenders typically reserve the best interest rates for those with the highest credit scores. As of the first quarter of the year, the average annual percentage rate (APR) on personal loans with a 24-month loan term was 9.41%, according to Federal Reserve data.

How to get approved for a fair credit personal loan

Your credit score is an important factor in your loan application, but it’s not the only thing lenders look at. You can improve your chances of getting a personal loan in many other ways — even if you don’t have excellent credit. Here are a few:

  • Bring in a cosigner. A cosigner is someone who agrees to share the legal responsibility of the loan with you — typically a family member or close friend. They won’t need to make monthly payments unless you fail to do so, and their credit score and other financial factors can be considered on your application. (So you’ll want to choose one with a good score and a history of on-time payments.)
  • Choose a secured loan. Secured loans are backed by collateral — a tangible asset the lender can seize if you fail to make your monthly payments. Secured loans are typically easier to qualify for than unsecured personal loans because they present less risk to the lender.
  • Decrease your debt-to-income (DTI) ratio. Reducing your DTI ratio — or how much of your monthly income your credit cards and debt payments take up — can improve your chances, too. You can do this by paying down balances or increasing your income (by asking for a raise or taking on more hours). You’ll want to shoot for a DTI of 30% or less.
  • Consider a variety of lenders. Every lender has different loan products, origination fees, and qualifying requirements, so shopping around is critical if you have a fair credit score. Compare at least a few options to ensure you’re getting the right loan for your budget and goals.
  • Gather your documentation. You’ll need a variety of financial documents when applying for a personal loan, so pull them together early to ensure a quick and painless process. You’ll need pay stubs, bank statements, past W-2s and tax returns, and a copy of your driver’s license or state ID.

Your lender may require other items as well, so be sure to check with your banker or loan officer for the full list of documents you‘ll need to apply for a personal loan.

Visit Credible to see your prequalified personal loan rates to find the one that best suits your needs.

How to improve your credit

Increasing your credit score can also make it easier (and potentially more affordable) to get a personal loan. Here are some things you can do to boost your score:

  • Check your credit report. You can request free copies of your credit reports from the three main credit bureaus — Equifax, Experian, and TransUnion — by visiting If you spot any errors, you can dispute them with the credit bureau, which can improve your score if the error is removed.
  • Pay down your debts. Your credit utilization ratio — or how much credit you’re using compared to how much available credit you have — accounts for 30% of your credit score. Reducing your balances can lower your credit utilization ratio and, subsequently, increase your score.
  • Automate your bill payments. Your payment history makes up another 35% of your score, so make sure you’re paying your bills and credit cards on time. Try to set up autopay so that you never miss a payment. (And if you’re currently late on any accounts, settle those up ASAP.)
  • Keep old accounts open. Don’t close your accounts or credit cards — even after you pay them off and are no longer using them. The length of your credit history comprises 15% of your score, so keeping these old accounts open can actually help your score.

Keep in mind that your credit score won’t change overnight. It may take several months, or even years, before you see a notable change.