Can I Get a Loan With A 550 Credit Score?

One of the benefits of having a high credit score is that it’s easier to qualify for loans— and at better terms. While it is still possible to get a loan with a 550 credit score, it’s often more difficult to get approved, and you’ll likely face less favorable rates and terms.

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 to minimize that risk. However, some have lower score requirements.

Before you apply for a bad credit loan, consider your current financial situation, when you need the loan and the financing options you may have.

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

Yes, you can get a loan with a low credit score. But just because you can, doesn’t mean you should.

“This type of loan is a specialty for 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 your borrowing experience 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: With a low credit score, you’re unlikely to qualify for a lender’s maximum terms since extended repayment means more time to default. Unfortunately, a shorter repayment term means higher monthly payments, which could be harder to keep up with.
• Aggressive debt collection tactics: Lenders who knowingly take on higher risk may be prepared for potential consequences and may be more apt to utilize debt collection to get what’s owed. Payday loans are notorious for making incessant and harrassing phone calls and threatening legal action if you fail to make your payment.

Know your rights

Even if you’ve fallen behind on payments, you still have consumer credit protection. The Fair Debt Collection Practices Act (FDCPA) specifically protects borrowers from unfair, deceptive or abusive practices by debt collectors. For example, it sets time limits on when collectors can contact you and prohibits harassing language.

Is 550 a good credit score?

While it’s not the worst possible credit score, 550 is not considered a good credit score. 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 and the Consumer Financial Protection Bureau (CFPB) considers a 550 FICO Score “deep subprime” — in both cases, the lowest credit tier.

If you have a low credit score, you aren’t alone. According to Experian, one of the three major credit bureaus, 13.2% of consumers had a poor credit score in late 2024. Still, you’ll want to do the work to repair your credit as a low score can affect your finances in several ways, including costing you more money to borrow, if you even qualify.

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 — or even into the triple digits.

Learn more: Today’s average personal loan rates

A realistic look at the cost of bad credit

Suppose you need to borrow $15,000. With excellent credit, you may receive a rate of 11 percent. Over a 48-month repayment term, your monthly payments would be about $388, and you’d pay $3,608 in total interest.

That same loan with bad credit is significantly more expensive. With a 550 credit score, you may receive a lender’s top-end rate, which is often 35.99 percent. Your monthly payment would be $594, and you’d pay a whopping $13,492 in interest.

In this example, you’d pay an additional $10,000 in interest over the life of your loan if you have bad credit.

Types of loans to consider if you have a low credit score

Personal loans: If you need to borrow a large sum of money, a personal loan may be the best option. While rates can be as high as 36 percent, the repayment term is typically longer than other financing options. Personal loans are available through banks, credit unions and online lenders.

Secured loans: Some lenders allow you to secure your personal 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.

Small loan from a credit union or bank: Some banks may offer existing members a small loan with a short term. “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.

Joint loans: Consider using a cosigner or co-borrower 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. Just make sure you manage the loan responsibly. If not, you’ll negatively impact your cosigner’s credit.

Buy now pay later (BNPL): Depending on how much you need and what you’re financing, you may be able to use buy now pay later, which offers short-term financing typically with no credit check or interest charged. But beware: a recent BNPL survey from Bankrate found that about half of BNPL users have experienced issues. Additionally, if you miss payments, you could be charged a late fee and be reported to the credit bureaus.

Payday alternative loans (PALs): A safer option than payday loans, PALs are offered by federal credit unions and often come with high interest rates, capped at 28 percent. They typically have lower fees and longer repayment terms than payday loans, but you’ll likely need to be a member of the credit union offering this option.

Payday loans: With APRs that can exceed 400 percent, payday loans are dangerous. The max amount you can usually borrow from a payday loan is $500, and the balance is due in full by your next pay day. With such a short repayment term and exorbitant rate, payday loans are a risky option for any borrower.

How to get a personal loan with a 550 credit score

If you decide to get a personal loan, finding one with a 550 credit score will be more challenging. It’s important to be thoroughly prepared to navigate the process.

• Do your research. Eligibility guidelines and products can vary widely by lender. It’s important to research and compare personal loans and their lenders to find out which lender and loan product is best for you.
• Shop around and prequalify. Compare rates and terms to get the best deal for your situation. Some lenders allow you to prequalify for a personal loan, which provides you with more customized loan offers without hurting your credit score.
• Choose a lender and apply for your loan: Once you decide to apply, a full application will result in a hard credit check, which can temporarily drop your score. Make sure you understand the terms of the loan, as you’ll likely have more limitations and higher interest rates because of your score.
• Make on-time payments: Consistently making on-time payments for at least the minimum amount due each month and paying down that debt can help rebuild your credit score. Remember, payment history and credit utilization are the two biggest factors in credit scoring.

Bankrate tip

Repaired credit doesn’t happen overnight. It may take several months to see a meaningful improvement, but taking these actions may help you get speedier results:

• Review your credit score for errors and dispute any your find.
• Pay down credit balances to improve your credit utilization.
• Become an authorized user on a responsible person’s account
• Use credit-building apps and services, like Experian Boost, to report on-time rent payments and utility bills

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.