What credit score do you need to get a personal loan?

FICO credit scores range from 300 to 850. Thankfully, a perfect 850 isn't necessary to get approved for personal loans, but most lenders do have a minimum range for approval.

Below, CNBC Select breaks down why your credit score matters, what score you need for approval, tips for raising your score and more. 

Your credit score is calculated by weighing a variety of factors from your credit reports, including your payment history, credit utilization ratio, and the average age of your accounts.

Lenders believe your three-digit score gives a good indication of how likely you are to pay back a loan on time and in full. As a result, the higher your credit score, the more likely you are to get favorable terms, like lower interest rates.

There is no universal score for all lenders, but you generally need a FICO Score of 580 or higher to qualify for a personal loan. To qualify for the best terms, you'll typically need a score in the 700s.

"If you have a 760 credit score, they'll give you different terms versus if you have a 580 credit score," said Jim Droske, the president of Illinois Credit Services. "A lender may still give you a loan with a 580, but they'll adjust the terms accordingly because you'll be seen as riskier."

Some lenders will tell you upfront what their minimum requirements are: Happy Money requires a FICO 620 for approval, for example.

"Before you have a bunch of different lenders run your credit, ask if they have a credit score requirement and what it is," Droske said. "You can also ask what scoring model they use, so you can see for yourself if your credit score currently falls in their required range."

Another option is to get prequalified before you formally apply. That will give you an estimate of the rate you could be approved for and how big of a loan, without running a hard inquiry.

You can use a loan comparison tool, like this one, to compare offers without hurting your credit score.

Some lenders, like Upstart and Avant, focus on borrowers with bad credit. You'll probably face higher interest rates, more fees and a lower loan limit, so shop around before signing an agreement.

You may also be able to secure financing with bad credit if you apply with a co-borrower or use collateral to secure your loan.

Upgrade accepts joint applications and offers rate reductions for setting up autopay, and having it directly pay your creditors on a debt consolidation loan.

LightStream also accepts co-borrowers and, if you are approved by 2:30 p.m. ET, the money can be available the same business day.

OneMain Financial allows borrowers to use their vehicle as collateral. Keep in mind that, if you default, it has the legal right to take and sell your car. You may also owe repossession and auction fees and a deficiency balance if the car fails to sell for at least the amount you owed.

Best Egg has fixture-secured loans, which use features of your home, like cabinets, HVAC systems or solar panels as collateral. While it's unlikely to repossess those fixtures, you may be unable to finance or sell your home if the balance isn't paid off.

If you aren't in a time crunch, you may have time to improve your credit before submitting an application.

1. Pay down revolving lines of credit: Payment history accounts for a whopping 35% of your credit score, so paying your bills on time has the biggest impact on improving your score.

2. Lower your credit utilization: So long as you don't charge more, paying down your bills will lower your credit utilization ratio, which is the amount of credit you're using compared to your overall limit across all cards. It accounts for another 30% of your FICO Score.

3. Avoid opening new lines of credit: The average age of your accounts is another factor that determines your credit score, and every new card lowers that average. In addition, each application requires the issuer to conduct a hard credit inquiry, which can temporarily lower your score by several points.

4. Check your credit reports for errors: Review your credit reports with all three credit bureaus for any mistakes or signs of fraud. You can get free copies at AnnualCreditReport.com or by calling 877-322-8228.

Common errors include:

• Accounts or loans that have been settled listed as unpaid
• Individual loans listed multiple times
• Closed accounts reported as open
• Debts incorrectly reported as in collections
• Fraudulent accounts listed as a result of identity theft
• Incorrect current balance or credit limit
• Information from someone with a similar name or Social Security number

Disputing a credit report error may take some time and effort on your end, but can make a noticeable difference. You can also subscribe to a credit repair service, which will work to correct mistakes on your behalf.

FICO and VantageScore are the two leading credit score models, although FICO Score 8 model gets used in about 90% of U.S. lending decisions.

Most credit card issuers provide free access to credit scores to their cardholders, although they rarely offer information on both FICO and VantageScore from all three bureaus.

Experian's free credit monitoring service delivers your Experian credit report and the FICO score it generates, for example, while CreditWise from Capital One provides free FICO Score 8 from TransUnion, for example, while

For the most thorough data, a paid subscription to myFICO gives you access to your FICO scores, including specialized versions used for mortgages, auto loans and credit cards across the three bureaus.

If you want FICO and VantageScore scores from all three agencies, you'll need to enroll in a credit monitoring or identity theft protection service, which usually also comes with dark web monitoring, password managers and VPN generators.

5. Become an authorized user. If you have a friend or family member with good credit who is willing to make you an authorized user on one of their credit cards, your score can benefit from their responsible use of credit.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed financial decisions. Every personal loan article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of personal loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. 

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Jim Droske, President at Illinois Credit Services.

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