Loans with 520 FICO Score

How to Get a Personal Loan With a 520 Credit Score

Most of us are well-aware of the three-digit number that typically ranges from 300 to 850: credit scores. The higher your score, the better it indicates to lenders that you are financially responsible, which in turn will help boost your chances of receiving a personal loan from them. As for those on the opposite side of the spectrum indicating poor credit, it is difficult – but not impossible – to receive the loan one requires. Before one gives up all hope, it is important to keep in mind the options at hand for improving one’s likelihood of getting that loan, bad credit included.

Chances of Getting a Personal Loan with Bad (500, 520, 550) Credit Score

Before jumping into how one can get a loan despite being cursed with 520 credit score, it is important to discuss the chances one has of receiving a loan to begin with, with current circumstances in mind. First and foremost, a bad credit score is considered anything below 550. In terms of a personal loan, some lenders will not consider borrowers who have credit below 600. Others may be content with providing a loan for those with a credit score of 520. Usually, the 580 range is the bare minimum for many lenders.


There is a good reason for disproving one for a personal loan due to their credit score. Imagine you let a friend borrow $500. If your friend is already having difficulty keeping up with their bills and paying back debts, it is highly likely you won’t be receiving the borrowed money back anytime soon – or ever. This same concept applies to credit unions and its borrowers. They want to ensure you are financially capable of paying back what you borrowed and have the willpower to manage your money correctly with efforts to do so.

Even though the process of receiving a personal loan with a 520 credit score can be a bumpy ride, the takeaway is that there are things you can do. One will want to make improvements to their credit score and other relevant factors to ensure they come off to lenders as capable of paying back the loan when the time comes.

Tips on Getting a Loan with a Credit Score below 520

Your credit score is used by lenders to specify the interest rate you will paying for borrowing money through them; the worse your score, the more you will have to pay back. Your credit score is also one of the most integral determining factors in whether or not you will be accepted for a personal loan.

Fortunately, if your credit score is around the 520 range, you’re in luck as there are ways you can still receive a personal loan, as through the following:

Work on your credit

One of the first things to do when in a bad credit situation – especially when hoping to be approved for a personal loan – is to start rebuilding your credit as soon as possible. When your credit score is 520, you’re just 30 points away from the ‘bad’ to ‘poor’ range. It can take just a matter of months to show improvements in your credit score to the bare minimum to be approved for a personal loan.

Consider the following when attempting to boost your credit:

  • Cut back on your credit card usage
  • Don’t open up any more credit cards
  • Focus on paying back existing debts
  • Pay your bills on time going forward
  • Receive financial counseling
  • Contact your creditors if you’re still struggling

Reach out to bad credit lenders

If it is urgent that you receive a personal loan as quickly as possible, get in contact with a bad credit lender – one who will offer finance regardless of your bad credit. Through these lenders, a credit score of 520 may not be as significant of a deal breaker as it may be to other lenders.

Before considering this option, however, it is important one is confident in their ability to pay back the loan on time. Finding a trustworthy lender is also crucial. OptLoans is one example of such that operates in several states. OptLoans offers to fund up to $4,000 to be paid back as late as 24 months. While poor credit is not an end-all-be-all factor from bad credit lenders such as OptLoans, the process also depends on the potential borrower’s income and how much they are requesting.

Consider a cosigner

If your bad credit is still preventing you from receiving a personal loan, ask a family member or friend to be your potential cosigner. A cosigner is an individual who legally allows you to “borrow” their credit score to get you approved for a loan and agrees that they will be in charge of paying back your debt if you are unable to. Having a good cosigner will help you to get a personal loan with 520 credit score much easier. Through cosigning, you also risk hurting your cosigner’s credit score if you do not pay the loan back on time. Opting for a cosigner that is close to you relationship-wise may either be the best or worst thing you do depend on your motivation (or lack thereof) in being financially responsible, to ensure that the relationship will not be damaged in the process.

Keep in mind that not all lenders will accept cosigners. If you are in this scenario, check with potential lenders if they will accept spousal income to be listed on your application.

Opt for a secured loan

Through an unsecured loan, borrowers promise their lenders they will repay the loan or else the borrower will have the authority to go through legal means, such as through a collections agency, to retrieve the money by force. Of course, a borrower will prefer to not go through the trouble of obtaining money through a collections agency. This is why lenders offering unsecured loans are more likely to consider one’s financial history before approving them.

However, with a secured loan, the borrower agrees to give up an expensive possession, such as a vehicle or a home, to the lender if they fail to repay the money borrowed. Because there is a valuable belonging on the line, lenders know that borrowers will be more likely to pay back their dues, thus being more likely to accept applicants with poor credit. Going through a secured loan option is not for everyone, but one thing is for sure: it is easier to be approved for with a bad credit score.

Contemplate peer-to-peer lending

Only around since 2005, peer-to-peer lending (also known as person-to-person lending) is quite a new option for receiving a loan. Instead of borrowing money via an institution, money is legally borrowed from a single individual online. One’s credit score is still used in the approval process through this type of lending, but since individuals are apart of this process, there is greater leniency involved, including lower interest rates in many cases. However, some of the top peer-to-peer networks prefer a minimum credit score of 600.

You can search for various peer-to-peer lending networks online. These networks provide a secure way for lenders to verify their potential borrowers’ information and a safe route to send the money. Besides varying interest rates, each provides different loan terms, borrowing levels, origination fees, and even the time to receive the funds – keep all of these factors in mind when conducting your research.

Join a credit union

Credit unions, which are non-profit financial facilities, are more lenient than banks when it comes to approving loans for those with 520 credit score. While financial responsibility still plays a role in the determining process of your loan application, other factors are strongly considered too. However, to potentially receive a loan from a credit union, one has to apply for membership.

Follow up with the lender if they reject you

When denied a personal loan, most are quick to leave it at just that. What many don’t know is that lenders are often willing to reconsider offering you a loan if you make the effort to reach out to them. There are valid reasons for a follow-up. The goal should be to think of specific reasons why you are responsible enough to take on a personal loan despite holding bad credit. Perhaps you recently started working at a new job and have a greater source of income now or can otherwise prove that you are financially capable of paying back the borrowed money. The only harm in asking for another chance is getting rejected again.

Turn to friends or family for a loan

If worse comes to worse, another option for getting a loan with bad credit is asking a close friend or family member to let you borrow money for a specified period of time. Especially when it comes to borrowing from someone you personally know, it is important to discuss the timeline for which you will pay back the money and if interest or any other additional benefits that are to be given to the lender in exchange for the money borrowed. As the borrower, you will want to maintain the relationship with the lender, thus should only ask to borrow if absolutely necessary.

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