Best Personal Loans for Credit Score 550 & Under - Bad Credit (2024)

Is a 550 a bad credit score?

The credit score most lenders use is called a FICO score. Your FICO score is generated by pulling information from your credit report. Your FICO score pulls data from three credit reports: Experian, Transunion, and Equifax. Your score is based on how much debt you have, the length of time you have had credit, if there are new accounts, and your payment history.

The ranges are as follows:

• 300-579-poor or bad credit
• 580-669-fair credit
• 670-739-good credit
• 740-799-very good credit
• 800-850-exceptional credit

As you can see, a credit score of 550 is poor or bad. If your credit score falls into a poor or bad category, see this as an opportunity not an obstacle. Take advantage of the opportunity to rebuild your credit score and graduate to a fair or good category.

Can you get a personal loan with a 550 credit score?

You may be able to get a personal loan with a credit score of 550, but it will probably be challenging. Lenders can see that you have had problems repaying your debt in the past and might be reluctant to lend to you if you have a credit score of 550. If you are approved, they may want to secure the loan with an asset of yours. They may want a cosigner. Lenders usually charge a much higher rate for personal loans for 550 credit scores. It is up to you to decide if the terms being offered, if you qualify, make sense or not for your situation.

What are the best personal loans for a 550 credit score today?

The best personal loans for a 550 credit score will depend on what you prioritize. Loan amount, repayment period, APR, monthly payment amount, and additional fees can all be a deciding factor in what the best loan for you looks like. Unfortunately, personal loans for credit scores under 550 can be difficult to obtain, so you may not have the luxury of several offers to choose from.

Consider boosting your credit score or applying with a cosigner with good credit to increase your chance of approval. Offers are more likely to be returned for borrowers with fair, good, or excellent credit. This means that the better your credit score, the better the options that may be available to you.

The online marketplace for personal loans may contain more subprime lenders, thus expanding options for borrowers to find the best personal loan with a 550 credit score.

How do you compare 550 credit score loans?

Comparing loan offers with a 550 credit score can be more challenging than comparing offers with an excellent credit score. With fewer options available, you may need to get creative and/or enlist some patience. The best place to start is by checking your credit score. Identify ways to improve your score before applying for a loan, if possible. You may have to skip this step if you need a loan now. To compare offers, find lenders that you have the best chance of qualifying with. Some lenders make their minimum credit score requirement available, along with other requirements. At Acorn Finance, you can check personal loan offers. However, most of our lending partners have a minimum credit score requirement of 600.

What are the benefits of getting a personal loan with a 550 credit score?

We get it, life doesn’t always give you lemons that are juicy enough for lemonade. Time does not always permit you to

wait until the perfect time to apply for a loan. When you’re in a financial pickle, with no time to raise your 550 credit score before shopping for loans, there can still be benefits to taking out a personal loan.

Perhaps one of the biggest benefits of a personal loan is the opportunity to boost your credit score. While a loan may cost more for a borrower with bruised credit, you can make it pay off if you borrow responsibly. Additionally, it can grant you access to funds you need to make home improvements, improve cash flow, or get through a financial challenge.

Other Bad Credit Loans

• Loans for Teachers with Bad Credit
• Long-term Personal Loans For Bad Credit
• Pet Loans For Bad Credit
• Christmas Loans For Bad Credit
• Personal Loans For 570 Credit Score - Bad Credit
• Land Loans For Bad Credit
• Holiday Loans For Bad Credit
• Personal Loans For Bad Credit
• Personal Loans for Credit Score Under 550 - Bad Credit
• Personal Loans For 520 Credit Score - Bad Credit
• Bad Credit Personal Loans for 500 Credit Score
• Bad Credit RV Loans
• Debt Consolidation Loans For Bad Credit
• Emergency Loans For Bad Credit
• Bad Credit Loans In Texas
• Loans for Postal Employees with Bad Credit
• Car Repair Loans with Bad Credit
• Loans for Uber Drivers with Bad Credit

List pros & cons of 550 credit score personal loan:

Taking out a personal loan of any size with any credit score can be a big decision, but a personal loan for a 550 credit score may require some extra consideration. Smart financial decisions require a lot of thought; a pros and cons list can be helpful in deciding if applying for a personal loan with a 550 credit score is a good idea.

Pros

• The opportunity to rebuild your credit. It takes on-time payments to prove your credibility, so having some credit to display that with is helpful. With regular on-time payments, your bad credit personal loan can be pivotal in boosting your score.
• The opportunity to overcome your financial hurdle. Whatever you need a 550 credit score personal loan for, it can be a sign of relief to have the funds to complete your financial task.
• More manageable than a lump sum. Again, whatever your financial needs are, it’s often more feasible to break down that cost into monthly payments versus one large expense.

Cons

• Potential negative impact on your credit score. You may see an initial dip in your credit score after any hard inquiry, which can happen when you apply directly with the lender. Don’t worry, though, as this should be temporary. Additionally, your credit score can be impacted if you are late on payments or default on your loan agreement.

• High interest rates. While you can mitigate the raised interest rates with collateral or a co-signer in some cases, generally speaking, bad credit borrowers will get stuck with higher interest rates. This is because lenders assume a larger risk when loaning someone with no proven credibility.
• Added financial obligations. It’s possible that financial setbacks may have been what caused your credit to fall into the bad range in the first place. Be cautious of falling into a cycle of credit drowning.

Pros and cons of lenders for 550 Credit Score Personal Loan:

LightStream

Qualifications needed:

• Credit score of 660 or above
• Minimum income of $50,000 a year

PROS:

• Allows the addition of a cosigner to loan agreements
• No origination fees
• May offer lower interest rates, longer repayment periods, and higher loan amounts than some other lenders

CONS:

• Qualification requirements can be strict
• You may be subject to a hard credit pull when pre-qualifying for a loan directly through the Lightstream website (no preapprovals)

SoFi

Qualifications needed:

• Credit score of 680 or above
• Minimum income of $50,000 a year

PROS:

• Allows the addition of a cosigner to loan agreements

• No origination fees
• May offer lower interest rates than some other lenders
• Flexible loan amounts and repayment terms for well-qualified borrowers

CONS:

• Longer approval times when compared to many online lenders
• High credit card requirements

Best Egg

Qualifications needed:

• Credit score of 600 or above

PROS:

• No minimum income requirements
• Works with fair credit borrowers
• Fast funding times

CONS:

• Origination fees may apply up to 6.99%

• May see offers with higher APRs than some other lenders

Prosper

Qualifications needed:

• Credit score of 600 or above

PROS:

• Peer-to-peer lending
• No minimum income requirements
• Flexibility with payment due dates

CONS:

• Origination fees may apply
• Funding may take some time

Upgrade

Qualifications needed:

• Credit score of 560 or above

PROS:

• No minimum income requirements

• Joint applications allowed
• Willing to work with bad credit borrowers

CONS:

• Origination fees of up to 8%
• May see offers with higher APRs than some other lenders

Axos Bank

Qualifications needed:

• Credit score of 700 or above
• Minimum incomes of $48,000 a year

PROS:

• Low origination fees
• Mobile app is available for easy loan and payment management
• Fast funding

CONS:

• Origination fees up to 2%
• High credit score requirements

OneMain Financial

Qualifications needed:

• Credit score of 600 or above
• Minimum income of $7,200 a year

PROS:

• OneMain offers secured loan options for borrowers with subprime credit
• Low-income requirement

CONS:

• Origination fees up to 10%
• Higher APRs than some other online lenders

LendingPoint

Qualifications needed:

• Credit score of 600 or above
• Minimum income of $30,000 a year

PROS:

• Low origination fees
• Fast funding times
• May be easier to qualify due to relaxed qualifications

CONS:

• No joint applications

Lending USA

Qualifications needed:

• Credit score of 620 or above

PROS:

• No interest will be charged to the principal balance if your loan is repaid within six months
• Fast funding
• Small loans amounts available (as little as $1,000)
• High approval rates

CONS:

• Higher APRs than some other lenders

While Lending USA is not an Acorn Finance lending partner, you can visit their website to check offers.

Universal Credit

Qualifications needed:

• Credit score of 560 or above

PROS:

• Low credit score requirements

CONS:

• Higher APRs than some other lenders

Reprise Financial

Reprise Financial assists customers in finding the loan that suits their financial goals and needs. Reprise works by streamlining the personal loan search process. Check for offers at Reprise Financial.

The amount you can qualify for with a credit score of 550 usually depends on the lender. One lender that considers borrowers with a credit score of 550 is Avant. They can lend up to $35,000, and their rates range from 9.95%-35.99%. OneMain does not have a minimum credit score, and the maximum amount they lend is $20,000. Their rates range from 18%-35.99%.

Some lenders grant quick approval times for loans, but this is more common if you have a good credit score. When people have poor credit scores, lenders usually take more time to investigate the file. Sometimes this can take a few days or more. If you want a quick turnaround time, try applying online.

The credit score needed for a $5,000 personal loan will depend on the lender. Most lenders like to see a credit score of at least 660. As you have seen from the chart above, this means the borrower's credit is on the high end of a fair credit rating. Some lenders like Avant may consider borrowers with a credit score of 550, while others, like OneMain, don't have a minimum credit score requirement. Before applying for credit, it is a good idea to check your credit score. Once you know what it is, you can approach lenders to see their minimum credit score requirements for a $5,000 loan.

Personal loans for credit scores under 550 aren't easy to get, but it is possible to find lenders that are willing to loan small amounts. Sometimes it is easier to apply for a secured credit card with a $3,000 limit if you have bad credit. You can try online lenders or lenders that don't have a minimum credit score. Another alternative is a title loan, where you use the title of your vehicle as collateral.

Some lenders like Avant can fund loans for up to $35,000 for borrowers with a minimum credit score of 550. You might also be able to qualify for a car loan or credit card. It depends on what you need the money for and how much you need. Different lenders have different criteria. You can contact lenders you would like to deal with to see what their criteria are and how much you would qualify for. While your credit score has a significant impact on your ability to borrow, it isn't the only thing lenders consider. Lenders also consider income, net worth, and if there are assets available to secure the loan.

If you need a personal loan with a 550 credit score, it is only natural to want to know who offers the best deal. If you need $10,000 or less, some lenders to consider are MoneyMutual, CashUSA, and CreditLoan. If you need a larger amount, you can consider OneMain for loans up to $20,000 or Avant if you need up to $35,000. Be sure to check rates and fees like origination fees and prepayment fees. Extra charges can add a lot of additional expenses to your loan. It's best to avoid them as much as possible.

Even though borrowers with a 550 credit score may find it extremely difficult to find lenders willing to consider them for personal loans, there are still a few lenders out there that may be willing to work something out with a poor credit borrower. To find these lenders, it may be best to explore the online lending marketplace versus pursuing a personal loan at a traditional financial institution. Traditional banks may not even remotely consider someone with a 550 credit score for a personal loan whereas some online lenders may be more flexible. Because online lenders have much lower overhead costs, they may be able to be a little more flexible when it comes to taking on potential risk. That being said, if you have a credit score of 550, online lenders are not going to be lining up at the door to give you a personal loan. Online lenders are still going to complete a full risk assessment and they are going to want to see other factors that may lead them to believe that you are somewhat trustworthy although your credit score may not reflect it. They will want to see an extremely high monthly income with little to no existing debts. They may want to see some signs that you have been rehabilitating your credit history and that you are on an upward progression to which they can help you continue to build your credit. Lastly, they may ask you to secure the loan with some sort of collateral or by bringing on a cosigner to help with the payments if for some reason you are unable. If you do not have any assets of value that could be considered collateral, or you do not have a willing cosigner, there is still a chance you can qualify for an unsecured personal loan, however, you should understand that it could be quite expensive in the long run. Borrowers with a credit score of 550 may find that if they do qualify for an unsecured personal loan, it is most likely that they will be paying some of the highest interest rates that can sometimes reach up to 35.99%. In addition, they may need to pay an origination fee for the loan, and if they start to make late payments, the penalties will not be cheap either. If you are a borrower with a 550 credit score, you may want to consider taking a few months to build your credit in order to qualify for personal loans with much more favorable interest rates and terms. However, if you need the money immediately for an unexpected expense or an emergency, you should know that there still may be many options available to you through the online lending market.

When evaluating a potential borrower, lenders typically review the same factors whether the borrower has a credit score of 550 or 800. Some of the main things that lenders consider include an individual's credit history, their cash flow versus their existing debts, the amount of money they have in savings, checking, and/or retirement accounts, whether they have any assets that could be used as collateral, and what the purpose and the amount of the loan is.

Whether or not a personal loan is worth it always depends on an individual's situation. There are many circ*mstances where a personal loan for someone with a 550 credit score may be worth it, and then there are many circ*mstances where it may not. For example, if you are looking for a personal loan to consolidate your debts and build your credit score back up, then a personal loan with a 550 credit score may be worth it. If you rely on your vehicle to get you to and from work and you have an emergency repair and not enough savings to cover the expense, then a personal loan with a 550 credit score may be worth it to ensure you have no interruptions in your ability to earn a living. If you have a 550 credit score and you are looking for a personal loan to do some unnecessary renovations on your home or you are looking to go on a long vacation, then you may want to reconsider whether or not the loan may be worth it. For home renovations, if they are not inhibiting your ability to live in your home, you may want to consider waiting a few months and using that time to improve your credit score. Doing so could save you thousands of dollars in interests and fees over the life of the loan.

A FICO credit score is a number between 300 and 850 that represents your creditworthiness. This score is one of the first things that lenders look at when you apply for a new line of credit. A FICO credit score is generated by calculating your payment history, the total amount owed, length of credit history, new credit inquiries, and the types of accounts. The closer your credit score is to 850, the better. A credit score between 800 and 850 is considered exceptional. A score between 740 and 799 would be considered very good. A score between 670 and 739 is good. A score between 580 and 669 is considered fair, while a score below 580 is considered poor.

A credit score may be the result of missed payments, delinquent accounts, and possibly the occurrence of a negative credit event like home foreclosure. However, it could also simply be because the borrower has yet to establish a significant credit history.

There are many ways to improve your credit score from 550. First, make sure all your current accounts are current and pay off as much credit card debt as you can. If you have any accounts in collections, try to make some additional income and use it to pay off those delinquent accounts. If you have a credit score of 550 because you do not have a credit history, then you may want to consider a secured credit card. A secured credit card is a credit card that you can use normally to go to restaurants, buy groceries, and get gas, however, each month you send the credit card company a particular amount, and then you can use that amount to pay for goods and services until it is gone. Repeat next month, and each time you make a payment, the credit card company will report the payment to the three major credit bureaus helping you to build your credit gradually.

Raising your credit score by 50 points is not an easy task, however, it is not impossible. It really depends on the reason your credit score is at 550. Did you file for bankruptcy recently? If that is the case then it could take years to increase your credit score from 550 to 600. Is it because you do not have an existing credit history? Then it could take as little as 6 to 9 months to increase your credit score from 550 to 600.

Unfortunately, you won’t see much credit action overnight. Raising a 550 credit score can be a process. With continuous on-time payments, low credit utilization, and a growing credit age, your 550 credit score should be on its way up. While it may take months for your credit score to jump to the fair range, your hard work should pay off in time. Stay diligent and focused on the credit score you desire.