Minimum Fico credit scores needed for different types of loans

Who does not want to get a dream home, get an everyday car, or plan an event like a wedding or a once-in-a-lifetime dream holiday? Activities like this can cost a lot of money. And the fact is, that you usually do not have enough cash on hand when you really need it.

Sometimes there is really only one choice left when you are in these situations, and that is to take a loan from a bank or lender.

It is not easy to get personal loans  or do something like refinance a mortgage when you have nothing to show up as collateral.


Having a good FICO score can open up doors

If you have a good FICO credit score, however, you can use it to open the doors of every opportunity. In reality, your FICO score can act as a key to solve a lot of your financial problems.


So, what is that FICO score? Let’s check it out below.

What is a FICO score?

FICO stands for Fair Isaac Corporation. Fair, Isaac and, Company, later transformed into Fair Isaac Corporation or FICO, is primarily a data analytics company based in San Jose, California. It was established in 1956 by the hands of engineer William R Bill Fair and mathematician Earl Judson Isaac.

FICO score is an indicator of consumer credit risk. It has become the primary criteria of assessment of personal loans in the United States. Lenders use the FICO scores to evaluate the creditworthiness of a loan applicant. It ranges from 300 to 850, where the over 650 ratings advocate a rather strong credit history.

Nowadays, the FICO ratings are used as a measure of credit risk by major US financial reporting firms such as Equifax, Experian, and TransUnion. Many countries, including Mexico and Canada, and the fourth U.S. credit reporting agency, PRBC, are also using FICO scores because of its large degree of acceptability.

How is the FICO score calculated?

Before we move on to the minimum FICO scores required to applying for different loans, we want to discuss how the scores are calculated.

FICO is now used by a large percentage of banks and lenders to make credit decisions than any other model of scoring or reporting. FICO Scores are determined from your credit report using several different pieces of credit data. Such statistics are divided into five categories:

  • Past Payment history (35%),
  • Amounts owed or utilization (30%),
  • Length of credit history (15%),
  • Recent Activity or new credit (10%) and
  • Credit mix (10%).

fico score

In the chart above, you can see the weight of the different variables when assessing or calculating the FICO score. Of all, the most significant aspect is the payment history, measured based on the duration of your bill payment. If you delay payment of any of your bills, your score will be adversely affected. The importance of those categories will vary a little bit from person to person. 

In your credit report, your FICO Scores take into account both positive and negative information. While late payments weaken your FICO Ratings, a strong track record of making on-time payments will help you create or restore that.

What are the average minimum FICO scores needed to borrow money or get loans?

So, if we understand the FICO score is and how it calculated. Let us try to dissect what a minimum FICO score required to apply for different types of loans like mortgages, personal loans, auto loans, etc.

A higher credit score means that you are less vulnerable to debt default, and vice versa. Therefore, lenders usually give borrowers with high credit scores the best offers on loans (lowest fees and interest rates) than the low ones.

Minimum credit score to get a personal loan:

For the following reasons, we may need a personal loan-

  • To fund emergency accounts to cover medical expenses or unexpected costs
  • Funding large-scale acquisitions or once-in-a-life events such as wedding ceremonies and dream holidays
  • Accumulating credit card debt, repairing or expanding a house, or providing funds to fill an income gap

These are all forms of personal loans that are unsecured and not backed up by the borrower’s promised collateral.

Most lenders demand that you have a minimum credit score to apply for a personal loan, typically anywhere between 580 and 600.

Usually, lenders tailor their deals according to credit scores. They often offer the very best terms for borrowers with outstanding scores and credit history.

Let’s assume, for example, that a lender doesn’t offer loans to lenders with FICO scores under

If you have between 600 and 620 FICO scores, the lender will provide you with an average interest rate of 38 percent for a $5,000 loan. If the scores are between 620 and 650, the interest rate for the same amount of loan decreases to 36 percent, and so on. So, it’s noticeable that a gap of only 20 points will save you hundreds of dollars in interest over your loan life.

Minimum Credit Score to Get a Mortgage:

There is no universal credit score required for a mortgage,” says Mat Ishbia CEO and president of United Wholesale Mortgage.

Depending on the type of loan and creditor, the credit score requirements for a mortgage can vary. There are four common mortgage types:

  1. Federal Housing Administration loans
  2. Veterans Affairs loans
  3. United States Department of Agriculture loans
  4. Conventional loans

From the above four, FHA, VA, and USDA loans are the Government approved mortgage. That means if you get a loan from a nominated lender and the Government guarantees that loan for the bank.

However, a conventional loan is not related to any of these government programs. Instead, it is a traditional conceptual mortgage product.

The table below highlights what FICO score is usually required for different types of mortgage loans to buy a house:

Loan Type Minimum Fico Credit Score Applicable For
FHA 580 @ 3.5% down payment; 500 @ Low to moderate-income
10% down payment homebuyers
VA No fixed minimum score for VA; Veterans or old-hands
however, most lenders need a credit buying a home
score of at least 620, although some
may accept a score as low as 580
USDA USDA specifies no score, but the Qualified buyers who buy a
minimum recommended FICO score is house in a given rural area
Conventional 620 to 640 Buyers seeking a
traditional mortgage

Data source:

Minimum Scores required for different types of loans or credit cards:

See below for minimum credit scores for different credit cards below.

Loan Type Minimum Fico Credit Score
Auto Loan For avail a new car – 715 and 662 for a used car
Store Cards For Sears Card – 640
The required score for other store cards like Kohls is between 580 to
Apple Card 600; however, if you want to purchase a new iPhone using it, you will
need at least 700 credit score
Gas Card Most of the gas-stations desired to have at least reasonable credit
ratings. You can avail of one with a FICO credit score of 580. However,
applicants with scores above 650 will have the best chances.
If you want to avail of Exxon gas card, you have to have a fair credit
score of 640+ to qualify.
Home equity loan To avail home equity loan you need a FICO score of at least 680
Student Loans To get Federal direct undergraduate loans, you no need of any credit
history or co-signer. You just need to fill up the Free Student Aid
Application, or FAFSA.
However, if you want to make use of the loan from Sallie Mae, you
need a good credit score, but they never disclosed the minimum
range. According to records, a 718 FICO score was required to qualify
for this loan in 2016.


If you do not have any money in hand, it’s not a concern at all if you have a good FICO score, but a low FICO score is a major problem.

So, your aim should be to improve your FICO score so you will be able to get a mortgage or an emergency loan if you need it. There are some good companies that like Sky Blue Credit that can help you to raise your score as well.