How to Use Your Credit Score to Get Better Loans
Published by Speed Credit
Table of Contents
- Why Your Credit Score Matters When Borrowing
- Loan Tiers by Credit Score: Where Do You Stand?
- Which Loans Are Affected by Your Score?
- How to Get the Best Loan Deal for Your Score
- Can You Get Loans with a Low Credit Score?
- Boost Your Score *Before* You Apply
- Next Up: Mastering Credit Cards Without the Debt Trap
Why Your Credit Score Matters When Borrowing
Your credit score is your financial trust score—it tells lenders how risky you are to lend to. A higher score means you’re more likely to get approved for loans and get lower interest rates. That’s not just a small perk—it could save you thousands over the life of a loan.
Let’s break it down and make sure you’re getting the absolute best deal for your situation.
Loan Tiers by Credit Score: Where Do You Stand?
Most lenders use these credit score ranges when deciding what loan terms to offer:
| Credit Score Range | Rating | Loan Terms You’ll Likely See |
|---|---|---|
| 750–850 | Excellent | Best rates and highest approval odds |
| 700–749 | Good | Very competitive rates, easy approval |
| 650–699 | Fair | Average rates, higher down payments may be required |
| 600–649 | Poor | High interest rates, limited options |
| Below 600 | Bad | Hard to qualify without a co-signer or special lender |
Which Loans Are Affected by Your Score?
Pretty much all of them. But here’s how your score plays a role in the most common loan types:
- Auto Loans: Lower scores = higher APR = more expensive monthly payments
- Mortgages: Even a 20-point drop can cost you tens of thousands in interest
- Personal Loans: Score determines your interest rate, term, and whether you qualify at all
- Credit Cards: Yes, these are technically loans! Your score affects your limit and APR
How to Get the Best Loan Deal for Your Score
Here’s how to squeeze the most value out of the score you already have:
- Shop Around: Use loan comparison tools like NerdWallet or Bankrate to compare rates
- Ask About Prequalification: It won’t hurt your score and gives you a preview of what you qualify for
- Look Into Credit Unions: They often offer better rates than big banks, especially for mid-range scores
- Negotiate: If you’ve got a strong payment history or other offers, you can often ask for better terms
[Image: Loan comparison dashboard screenshot, alt text: “comparing personal loan rates”]
Can You Get Loans with a Low Credit Score?
Yes—but you’ll pay more for the money. Here are some workarounds:
- Secured Loans: Use a vehicle or savings as collateral to reduce risk for the lender
- Co-Signer: A trusted co-signer with better credit can improve your odds (but be careful—you’re both on the hook)
- Credit Builder Loans: These aren’t instant cash, but they’re great for growing your score before applying for something bigger
If your score is under 600, focus on improving your credit fast before taking on major debt.
Boost Your Score *Before* You Apply
If you’ve got 30 to 60 days before applying, you can still make smart moves that improve your odds:
- Dispute errors on your credit report
- Pay down balances to lower your utilization
- Request a credit limit increase to widen that utilization gap
- Use Experian Boost to add positive payments
Small score jumps can unlock better interest rates—and serious savings.
Next Up: Mastering Credit Cards Without the Debt Trap
Loans are just one piece of the credit puzzle. Next, we’ll cover how to use credit cards the right way—to build credit, earn rewards, and avoid the dreaded debt spiral.
Read: How to Master Credit Card Use Without Falling Into Debt
