Imagine you’ve spotted your dream car online, or maybe you just need some extra cash to fix the boiler. But then, a nagging voice says, “What if your credit score is too low?” Credit scores feel like this mysterious number that decides your life, and sometimes it seems like lenders guard their minimum requirements like secret family recipes. So, how low can your score go before every lender says no? It’s probably less strict than you think—and a lot depends on the type of loan and the lender’s appetite for risk.
How Lenders Use Credit Scores to Decide Who Qualifies
Banks and credit unions handle hundreds of applications daily. A credit score is one of their fastest ways to sort risky borrowers from safe ones. It’s not the only thing—your income, debts, and repayment history all play roles—but your score is a big one. Most lenders use FICO or VantageScore. FICO ranges from 300 to 850, where higher is better. About 67% of Americans have a score above 670, according to Experian’s 2024 consumer credit review. The median score in the U.S. last year hit 719. But what if you’re way below that?
Subprime borrowers—those with scores under 620—aren’t rare. In 2024, about 16% of Americans fell into that camp. Some lenders won’t touch those applications. But “won’t touch” doesn’t mean “impossible.” Fact: Hundreds of online lenders, credit unions, and even some traditional banks offer loans to folks with lower scores. It’s all about risk vs. reward. Lenders who cater to lower credit scores often make up for the risk by charging higher interest rates or stricter loan terms. They watch for recent bankruptcies, overdue payments, and recent credit applications—all red flags.
Wondering what lenders see when you apply? Besides your score, they scan your payment history (have you missed a lot of bills?), total debts, and even how often you apply for new credit. Your job status counts, too. If your score is 600 but you have a steady paycheque and limited debt, you’re sometimes less risky than someone with a 650 score and lots of maxed-out cards.
The Absolute Lowest Credit Scores Lenders Accept
There isn’t a single “minimum credit score” that fits every type of loan. The numbers move depending on the lender and the loan product. Here’s a quick look at typical minimums in 2025—
| Loan Type | Conventional Min. | Best-Accepted Min. |
|---|---|---|
| Personal Loan | 560-600 | Upwards of 720 |
| Auto Loan | 500 | 680+ |
| FHA Mortgage | 500 (with 10% down) | 580+ (3.5% down) |
| VA Loan | 500-620 (varies) | 660+ |
| Conventional Mortgage | 620 | 740+ |
| Credit Card | 550-600 | 700+ |
Notice those bottom numbers. Some auto lenders, especially “buy here, pay here” lots, dip as low as 500. FHA mortgages, popular with first-time homebuyers, famously let you in with a lowest credit score of 500 if you can manage a down payment of 10% or more. For a lot of unsecured personal loans, some online-only lenders advertise approvals for scores starting at 560. Payday and title loans don’t even check—but those come with their own set of dangers.
Still, hitting the minimum doesn’t mean easy money. The lower your score, the stricter the terms: think sky-high interest rates, extra fees, and shorter repayment windows. You might get that car, but you could pay double for it by the end of your loan. Worse, some lenders pre-approve you, only to add conditions or lower the amount once they see your full credit report. If you’re near the edge, read every part of your loan agreement. Check for hidden penalty fees, insurance add-ons, or “loan protection” plans that bloat monthly payments.
Tips and Workarounds for Borrowers with Low Credit
Your credit isn’t set in stone, and lenders know that. Here are a few workarounds if your score is holding you back:
- Add a co-signer/trusted friend: Lenders love co-signers with strong credit. It cuts their risk and boosts your approval odds. But your co-signer is on the hook for payments, so only ask someone who really trusts you, and show them the loan agreement.
- Look at credit unions: They’re often more forgiving than big banks, especially if you have an account history or steady local job. Some local credit unions approve loans for members with scores in the 500s, especially for small-dollar products.
- Try lender marketplaces: Online platforms (like LendingTree, Upstart, or Upgrade) show you a bakery menu of lenders before you commit. One “soft” application won’t ding your score, and you can see your best rates across the board.
- Add collateral: Secured loans (where you use a car or savings as backup) are easier to get with weaker credit. The lender can take your asset if you default—so only do this if you’re 99.9% sure you’ll keep up payments.
- Build credit fast: Add a new “credit builder” loan, become an authorized user on someone else’s card, or use a secured credit card for groceries and pay in full each month. Even six months of on-time payments can bump your score up by 20-50 points.
- Ask about manual underwriting: Some smaller lenders will review your bank statements, pay stubs, and rent history by hand—sometimes letting you prove reliability beyond the number.
Don’t forget about special programs, too. FHA- and VA-backed mortgages exist for people with less-than-perfect credit, as long as you meet the other requirements like employment, debt-to-income, and down payments. If you mostly pay in cash, try reporting your rent and utilities with services like Experian Boost—those positive payments can show up on your next credit report.
Spot an ad that promises “no credit check, instant approval”? Double-check the fine print. A lot of these target desperate borrowers with high APRs and endless fees. If the numbers look suspicious, trust your gut and step away.
How to Improve Your Odds and Avoid Costly Mistakes
Your score may be low now, but it’s never fixed for life. Most credit reports update every month. The biggest fixes are usually the most boring ones: pay every bill on time, keep your credit card balances below 30% of your limits, and don’t apply for lots of new cards at once. One missed payment or a “hard pull” from too many lenders drops your score, sometimes by 10-20 points.
Check your credit report every few months for errors—seriously, it’s free at AnnualCreditReport.com, and errors show up more often than you’d think. A 2023 study by the Policy & Economic Research Council found 1 in 5 reports have a wrong account or payment mark. Dispute those, and your score can jump in a few weeks.
If you’re weighed down by debt, talk to a financial coach (a real, credentialed one!). Some nonprofits offer sessions for free. They can lay out a roadmap for paying down cards, working out payment plans, or even negotiating settlements. Lenders sometimes prefer a smaller payout to none at all.
If you want to boost your chances with lenders, consider these tips:
- Build a stable income history (even freelance work counts if you can show steady deposits).
- Lower your credit utilization: aim for 10% or less if you can swing it.
- Add positive trade lines with things like credit builder loans or secured cards.
- Slow down on applications—a “hard inquiry” lingers for two years and can spook cautious lenders.
- Gather proof of regular payments (like rent or cell phone bills) for smaller lenders who do manual reviews.
The truth is, lenders really do want to say yes. They make money by lending, not just by saying no. If you’re honest in your application, focused on improving your habits, and ask questions before signing, you can upgrade your options even if your starting point is rough. And once your score hits the next band—say, 580, 620, or 660—you’ll see offers with better rates and bigger amounts. That next approval might just be around the corner.