Can I get a loan with a 550 credit score?

Personal loans can be a helpful way to cover the cost of major expenses or consolidate credit card debt. Applying with a FICO score between 670 and 850 generally qualifies you for competitive interest rates and loan terms.

But it is still possible to get a loan with a 550 credit score. While it’s often more difficult to get approved with a score this low, there are lenders specializing in loans to borrowers with bad credit. However, you’ll likely face higher annual percentage rates (APRs) and less favorable terms than borrowers with better credit.

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

Lenders use your credit score to assess your risk as a borrower. Lower scores may mean that you’ve missed payments or have defaulted on loans in the past, and may be less likely to repay your debt as agreed.

Most lenders require a minimum credit score between 600 and 650, but some lenders specialize in bad credit personal loans. It may be more challenging to find a lender willing to work with you, but obtaining a loan with a 550 credit score is possible.

“This type of loan is a specialty for a very few lenders who have forceful collection arms and a capacity for risk,” says Michael Sullivan, the director of education with nonprofit credit counseling agency Take Charge America. “Any lender dealing in such loans expects many defaults and losses, and acts accordingly. The result is that a personal loan is almost always a bad deal for the consumer with poor credit.”

Having a credit score of 550 might affect the loan terms you’re offered in a number of ways.

• A higher interest rate: Your credit score is the top factor determining your interest rates with most lenders. Charging a higher APR helps lenders minimize possible losses.
• A smaller loan amount: Lenders think a low credit score means a borrower is more likely to fail to repay a loan. As a result, they may limit the amount you can borrow to reduce the chance that you’ll stop repaying the debt.
• A shorter repayment term: The longer the loan repayment term, the more opportunities there are for the borrower to hit hard times. With a low credit score, you’re unlikely to qualify for a lender’s maximum terms. This presents a dilemma for some borrowers — a shorter repayment term means higher monthly payments, which could be harder to keep up with.

What kind of credit score is 550?

A 550 FICO Score is considered deep subprime, according to the Consumer Financial Protection Bureau. The Fair Isaac Corporation (FICO), which is one of the most widely used credit scoring models, categorizes credit scores of 579 or lower as poor. According to Experian, one of the three major credit bureaus, 13.2% of consumers had a poor credit score in late 2024.

How bad credit affects personal loan rates

Lenders view a lower score as a sign of risk. To offset loss from potential missed payments or a defaulted loan, they tend to charge a higher interest rate if the borrower has bad credit. Average personal loan interest rates reflect this practice, with bad credit borrowers getting rates up to 35.99 percent at many lenders.

Learn more: Today’s average personal loan rates

How to get a personal loan with a 550 credit score

Obtaining a 550 credit score loan will be more challenging. It’s important to be thoroughly prepared to navigate the process.

• Do your research. Eligibility guidelines can vary widely by lender. It’s important to research multiple lenders to find out which lender is best for you.
• Shop around and prequalify. Compare rates and terms to get the best deal for your situation. Some lender websites feature a prequalification tool that allows you to view potential loan offers without hurting your credit score. Once you decide to apply, a full application will result in a hard credit check, which can temporarily drop your score by about five points.
• Consider secured loans. Some lenders allow you to secure your loan with collateral, like a house, car or other item of value. You’ll generally get better loan terms, but you risk losing your asset if you default on the loan.
• Try credit unions and local banks. “Often, having an existing relationship with a community institution is helpful, as they usually have more flexibility and may be willing to take a holistic look at your finances and evaluate your application based on more than just your credit score,” says debt attorney and finance expert Leslie Tayne, founder of Tayne Law Group.
• Find a cosigner. Consider finding a cosigner with a solid credit score if you’re unable to qualify on your own. “Many lenders will provide loans if they are guaranteed by someone with good credit,” Sullivan says.

Bottom line

Getting a personal loan with a 550 credit score is possible, but you’ll need to invest time in shopping around to find lenders willing to work with you. This is time well spent, as it will also allow you to find the best personal loan interest rate possible for your situation.

If you cannot get a personal loan with bad credit, consider redirecting your efforts toward improving your credit score. When your credit profile has improved, reapply for a loan.