Introduction
In order for a person to qualify for any loan, there are a number of factors that have to be considered by the lender. The first thing that the lenders look at is how lowest the person’s credit score could be. In general credit records play a very important role in determining whether a person qualifies for a loan or not. Of course there are many other factors considered, but this becomes the first consideration. A person who does not pass this stage will have his application automatically turned down. Many people, therefore, keep on asking themselves the lowest credit score that is required for them to qualify for a loan. This question is clearly answered below.
History
The lowest credit score required differ from one type of loan to the other. However, the lowest credit score has always been 300 to about 800. This is a wide range for any person. In fact very people would have the minimal and getting below minimal is worse than having no credit history. This means that very good percentage of people is above the lowest credit score.
Looking at the lowest credit score, a number of things may be affected by this score. For instance, the lowest credit score would attract high interest rate on a credit card. However, a person can always get a credit card irrespective of his lowest credit score.
Features
The other thing is about a car loan. In order for a person to get a car loan, his lowest credit score should be above 550. Even at this score, he would still face higher interest and heavy down payment. This may be so stressing to the person and he may seek for more help from external sources. It is, thus, important that a person set his lowest credit score above 650 for him to terms and conditions favorable.
Getting a mortgage loan with lowest credit score being below 550 is almost impossible. This is due to the fact that this is usually a big loan and repayment period is long enough. There are a few specializations where a person can get a mortgage loan with the lowest credit score being around 590. However, in such a situation, the terms and conditions would be very unfriendly. The interest rate could be extremely high. In order for a person to get friendly interest rate, his credit score should be above 720.
Tips and comments
This means that the lowest credit score a person needs for him to get a loan varies from one type of loans to the other. However, there is the minimal requirement that a person cannot go below. It is upon any person planning to get a loan to look at where his credit score falls and whether he is comfortable with terms and conditions at that stage.
The question about the lowest credit score required for a person to take a loan is hopefully answered. A person does not have to keep on worrying anymore. Many people can qualify for at least one type of loans.
