Key insights:
- Your credit score may impact your ability to acquire a personal loan and the terms you receive
- Lenders look at several factors beyond your credit score, such as your income and debt obligations
- You may improve your credit score by making on-time payments and lowering your credit utilization ratio
Your credit score can influence many aspects of your financial health, including the ability to qualify for a personal loan. The minimum credit score for a personal loan may vary by lender.
Credit management can also play a larger role in your overall financial goals. In Citi’s March 2026 U.S. Consumer Cards Credit Trends Survey, 94% of respondents said responsible credit management, such as maintaining a good credit score, is very or extremely important to achieving their personal financial goals.1
Let’s explore how credit scores work and other factors lenders consider and tips to help improve your credit score.
How do credit scores work?
A credit score is a 3-digit number lenders use to help predict your behavior when accessing credit, such as whether you’re likely to repay a loan. Your credit score is calculated using data from your credit reports, which typically include the following information:
- Payment history: A record of how reliably you have paid your credit accounts over time
- Amounts owed: The total debt you currently owe across all credit accounts
- Credit history length: How long your credit accounts have been open and active
- Credit mix: The different types of credit accounts you manage, such as credit cards and installment loans
- New credit: Recently opened credit accounts and inquiries from lenders
- Negative events: Any public records or severe delinquencies, like debt in collections or bankruptcy
There are several credit scoring models a lender may choose from to assess your credit score. These models may weigh factors differently, so it helps to confirm which credit scoring model your lender uses.
How your credit score can impact your personal loan application
Your credit score is typically a critical factor when you apply for a loan. The credit score required for a personal loan varies by lender.
Generally, the higher your credit score, the better your personal loan approval odds. Lenders typically see a high credit score as a sign of a more trustworthy borrower. A lower credit score may signal a higher-risk borrower.
Lenders might also use your credit score to help determine your interest rate and repayment options. Improving your credit score could help you pay less in interest over time.
Other common personal loan requirements
Alongside your credit score, personal loan lenders may also consider the following factors:
- Debt-to-income (DTI) ratio: This compares your monthly income to your debt obligations. Lower DTI ratios are more favorable.
- Income: Lenders may set a minimum income requirement to make sure you have the means to afford your loan payments.
- Age: Lenders typically have minimum age requirements for applicants.
You may not be able to change some of these factors. However, it’s important to be aware that they could impact your ability to qualify for a personal loan, the amount you can borrow and your interest rate.
Tips for building credit
If you have not-so-perfect credit, there are a few actions you might consider taking to improve it over time. The following habits may help you build your credit score and increase your chances of obtaining a personal loan in the future.
Check your credit report for errors
You’re eligible to receive a free credit report from the 3 major credit reporting agencies each week. If you find an error, you can dispute it with the credit reporting agency and lender. Keeping an eye on your credit report may help ensure that inaccurate information doesn’t affect your ability to borrow.
Make on-time payments
Payment history is the most significant factor in your credit score. When you consistently make on-time payments to your credit cards and loans, it suggests to lenders that you’re responsible enough to take on more debt.
Lower your credit utilization ratio
Your credit utilization ratio is the percentage of available credit you’re using at a given time. Using less of your available credit, such as keeping your credit card balance low, could help improve your credit score and increase your likelihood of qualifying for a personal loan.
Find the right personal loan with Citi
Reviewing your financial health before applying for a loan is a great way to understand your options. Your credit score, income and current debt all play a role in determining your eligibility. Some lenders, like Citi, may also allow you to check your rate on a loan before you apply. This lets you see what options might be available to you without impacting your credit score.
If your credit score is in good standing and you’re ready to apply for a personal loan, you can start comparing options that meet your needs. Citi offers personal loans to both existing and new Citi customers who meet specific eligibility criteria. This includes general creditworthiness, as well as additional factors determined by Citi.
Explore Citi® Personal Loans today to get started.
FAQs about personal loans and credit scores
Does a personal loan affect your credit score?
A personal loan may impact your credit score in several ways. Applying for a loan triggers a hard credit inquiry, which may temporarily lower your credit score. Using a personal loan to consolidate credit card debt may lower your credit utilization and help improve your credit score over time.
Could you get a personal loan with a lower credit score?
Some lenders might accept an applicant with a lower credit score. However, those lenders may offer higher interest rates and fees.
What is a good credit score for a personal loan?
It depends on the specific lender's credit score requirements. Personal loan pre-qualification can help you determine whether you’re likely to qualify for a given loan without affecting your credit score.
Could I use a personal loan to help build my credit score?
A personal loan could help build your credit score if you make consistent, on-time payments. Adding a personal loan to your financial profile may also improve your credit mix, which is another factor used to calculate your credit score.
Just keep in mind that taking out a loan will also raise the amount of debt you have, which may impact your credit score. For this reason, it’s important to only take out the amount you need and can comfortably repay.
Citibank Personal Loans
Citi offers personal loans to both existing Citi customers and new Citi customers that meet specific eligibility criteria, including an established credit and income history along with additional factors determined by Citi. If you think you could benefit from a Citi® Personal Loan, apply online today.
This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.1
1 Citi Consumer Credit Trends Survey, pages 10 and 20. Available at: Citi Consumer Credit Trends Survey
