Key takeaways

  • Shopping around can help you find lenders catering to subprime borrowers.
  • Consider using a co-signer or applying for a secured loan to increase your approval odds.
  • If you improve your credit score before applying, you may qualify for more attractive loan terms.

Personal loans can be a helpful way to cover the cost of major expenses. When applying for a loan, having a good to excellent credit score generally allows you to qualify for the most competitive interest rates and loan terms.

Even with a score of 550, it is still possible to get a loan. While it’s often more difficult to get approval with a score this low, there are lenders who specialize in providing loans to individuals with bad credit.

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

Though it may be more challenging to find a lender that’s willing to work with you, it is indeed possible to obtain a loan with a credit score of 550.

Most lenders require a minimum credit score of between 600 and 650, but some lenders specialize in personal loans for those with lower scores. Often the interest rates for such loans are far higher and the repayment terms less favorable. In some cases, you may not be able to borrow as much as applicants who have higher scores.

“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, personal financial consultant for the non-profit 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.”

What kind of credit score is 550?

A credit score of 550 is considered deep subprime, according to the Consumer Financial Protection Bureau. In fact, any score below 580 falls into the deep subprime category. The Fair Isaac Corporation (FICO), which is one of the most widely used credit scoring methods, categorizes credit scores of 579 or lower as poor.

How to get a personal loan with a 550 credit score

Obtaining a loan with bad credit will be more challenging so it’s important to be thoroughly prepared and understand how best to navigate the process.

Do your research

Some of the well-known lenders offering bad credit loans include Upgrade, where the minimum credit score requirement is 560, and Avant, which lends to those with credit scores as low as 580. There are many more lenders that cater to those with lower credit scores, but make sure you filter out the disreputable ones before applying.

Shop around and prequalify

Eligibility guidelines typically vary by lender. It’s important to research more than one lender to find out which has the best deal for where you’re at now.

Some lender websites feature a prequalification tool that allows you to view potential loan offers, including monthly payments and rates, without hurting your credit score. If you decide to formally apply, the lender may conduct a hard credit check that could ding your credit score.

Consider secured loans

This type of loan is secured by collateral, like a house, a car or some other item of value. You’ll generally get better loan terms, but your asset could be at risk 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 Leslie Tayne, founder of Tayne Law Group.

Find a co-signer

Consider finding a cosigner who has 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,” says Sullivan.

Alternatives to personal loans

If you’re unsuccessful obtaining a personal loan or the interest rates you’re offered are too steep, there may be some other options available.

  • Improve your credit: Not in a rush to get the money? Consider spending some time working on boosting your credit score to increase the likelihood for qualifying for loans with more favorable terms.
  • Personal loan from a friend or relative: You will want to identify someone with whom you have a good relationship and feel comfortable sharing personal financial details. Be sure to get the agreement, including the monthly payment amount, in writing to avoid any confusion in the future.
  • 401(k) loan: Consider taking a loan from your retirement fund if you have an employer-sponsored 401(k) plan. These types of loans don’t require a credit check. “They also come with low interest, which you pay back to yourself anyway,” Tayne says.

How to improve your credit score

If you have a credit score that is considered deep subprime or poor, there are several steps that can help improve your financial profile. Some of the steps work more quickly than others, so it is important to apply a mixture of the following options.

Check your credit report for errors

Start by making sure the raw information on your credit report that is used to calculate scores is correct. Federal law entitles you to a free copy of your credit report from the major credit bureaus weekly through the end of 2023.

Visit to get your copies and review all the contents of the reports “If you detect any errors, follow the directions on each agency’s website to correct the issues,” says Freddie Huynh, a vice president with the debt consolidation company Freedom Debt Relief.

Pay bills on time

Payment history accounts for 35 percent of your credit score. So, if you have any open past-due accounts, bring them current and continue making timely payments to avoid continued adverse credit reporting.

Reduce debt balances

The amount you owe creditors is another major component of your credit health as it accounts for 30 percent of your credit score. If possible, reduce your revolving debt balance to improve your credit utilization and possibly increase your credit score.

Maintain old credit cards

The length of your credit history accounts  for 15 percent of your credit score. Credit age is the amount of time you’ve had accounts open. It’s best not to close old credit accounts even after the balance is paid off, as this can reduce your overall length of credit history.

Open a secured credit card

Typically, this involves making a refundable deposit of $500 or less in exchange for a credit line equivalent to this amount. By using the card to make small, daily purchases and paying the bill in full each month, you can improve your credit score.

“Secured credit cards are typically issued to people with no credit or poor credit,” Huynh says. “This would include someone who needs to rebuild credit following bankruptcy, who needs help in building credit for the first time or who has a very difficult time managing spending and use of a credit card.”

Bottom line

Obtaining a loan with a credit score of 550 is possible, but you’ll need to invest the 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 most competitive rate possible. Check out Bankrate’s recommendations for bad credit loans for a list of reputable options.

If you’re ultimately unsuccessful in obtaining loan approval, consider redirecting your efforts to improving your credit score and then reapplying for a loan in a few months.