What lenders look at when your credit isn’t perfect
Plenty of people have fair or poor credit. A medical bill that went to collections, a stretch of missed payments after a job loss, or simply not much credit history can all pull a score down. The national average FICO Score is 714 (FICO); scores below 670 are generally considered fair or poor.
Your score isn’t the only thing lenders weigh. Most also look at:
- Income and stability. Steady income from work, benefits or retirement shows you can make the payment.
- Debt-to-income ratio. How much of your monthly income already goes to debt payments. Our DTI calculator shows yours.
- Recent history. A year of on-time payments after an old problem tells a different story than a recent missed payment.
- The amount and term. A smaller loan over a shorter term is easier to approve and costs less.
No one can promise approval. Each lender decides independently. A lender that guarantees approval before reviewing your application is a warning sign, not a perk.
What rates look like by credit score
These are conditional offers shown to users of one online loan marketplace in Q4 2025, before verification, for loans of $5,000 to $54,999. Small-dollar offers may differ, but the pattern holds: each step down in score adds several points of APR.
| Credit score | Avg. best offer | Avg. of all offers | Relative cost |
|---|---|---|---|
| 800+ (excellent) | 12.15% | 15.75% | |
| 740–799 (very good) | 15.54% | 17.89% | |
| 670–739 (good) | 20.61% | 23.27% | |
| 580–669 (fair) | 25.78% | 27.79% | |
| Under 580 (poor) | 29.05% | 30.25% |
Source: LendingTree marketplace data, Q4 2025. Bar length is relative to a 36% APR.
Your borrowing options with fair or poor credit
Fixed payment, no collateral
Some lenders specialize in fair credit. Expect higher APRs, compare origination fees, and keep the amount and term as small as you can.
Capped at 28% APR
PALs I: $200–$1,000 over 1–6 months, after one month of membership. PALs II: up to $2,000 over 1–12 months (America’s Credit Unions). Application fees are capped at $20 (Experian).
Backed by savings or a vehicle
A savings-secured loan from a bank or credit union can cost less because your deposit backs it. A vehicle-secured loan puts your car at risk if you can’t pay.
Their credit helps, their credit is at risk
A co-signer is “legally obligated to repay the loan if the primary borrower is unable to,” and missed payments can appear on their reports (CFPB).
Build history, not cash today
The lender holds the money in a savings account or CD while you make payments, reports them to the bureaus, then releases the funds (Capital One).
Often cheaper than any loan
Hospitals, utilities, landlords and many service providers offer installment plans, sometimes without interest. Ask before you borrow.
What a $1,000 loan costs at fair-credit rates
Fixed-rate, no origination fee, on-time payments. Even at higher APRs, a fixed installment loan has a payoff date and a known total cost.
| Option | APR · term | Monthly payment | Total interest |
|---|---|---|---|
| Credit union PAL | 28% · 6 mo | $180.54 | $83.24 |
| Fair credit (580–669) | 25.78% · 12 mo | $95.42 | $145.08 |
| Poor credit (under 580) | 29.05% · 12 mo | $97.02 | $164.25 |
| Riverstone network maximum | 35.99% · 12 mo | $100.46 | $205.49 |
Notice that the shorter PAL costs the least in interest, even with a higher payment. Borrowing less and repaying faster lowers your cost more than any other choice you control.
Loans to avoid: payday loans and upfront-fee “lenders”
Payday loans
The CFPB notes that a typical two-week payday loan with a $15 per $100 fee works out to an APR of almost 400% (CFPB). Borrow $500 and you owe a $75 fee every two weeks. If you can’t repay and renew it for about six months, that’s around $975 in fees and you still owe the $500. By comparison, $500 over 6 months at 35.99% APR costs $92.30 a month and $53.78 in interest.
Advance-fee scams
The FTC lists these signs that a “lender” is a scam (FTC):
- Ads promising loans regardless of credit, such as “Bad credit? No problem.”
- Fees required before you get the loan, often called insurance, processing or paperwork fees
- Fees that aren’t disclosed until after you’re told you’re approved
- Unsolicited calls offering loans in exchange for payment first
Riverstone will never ask you to pay a fee to see or accept an offer. Report suspected scams at ReportFraud.ftc.gov.
Rate caps and your rights
State caps. Many states limit what lenders can charge on small installment loans. For a $500 six-month loan, 19 states and Washington, D.C. cap the APR at 36% or less; for a $2,000 two-year loan, 31 states and D.C. do. Delaware and Missouri set no cap on either (National Consumer Law Center, Dec 2025).
Military Lending Act. Active-duty servicemembers, including active Guard and Reserve members, and their covered dependents are protected by a 36% Military APR cap that includes most fees and add-on products (CFPB).
Truth in Lending and Equal Credit Opportunity. Lenders must show you the APR and total cost before you sign, and they can’t discriminate based on race, color, religion, national origin, sex, marital status, age, or because you receive public assistance. If you’re turned down, you have the right to know why.
Steps that can improve your offers over the next six months
There’s no guaranteed number of points or timeline, but these steps target the parts of a FICO Score that matter most: payment history (35%), amounts owed (30%), length of history (15%), new credit (10%) and credit mix (10%) (myFICO).
- Get your free reports from all three bureaus; they’re available weekly at AnnualCreditReport.com (CDIA)
- Dispute any errors with the bureau and the company that reported them
- Set up autopay for at least the minimum on every account
- Pay down card balances to lower your utilization
- Avoid opening several new accounts at once
- Call creditors about hardship plans before you miss a payment
- Consider a secured card or credit-builder loan if you have little history
- Keep every payment on time to build a longer record
- Keep older accounts open to protect your length of history
- Check your reports again, then compare loan offers
The CFPB recommends checking your reports at least once a year for errors that could lower your score, and notes that requesting your own reports doesn’t hurt it (CFPB).
How to borrow responsibly with fair or poor credit
- Check your credit reportsKnow what lenders will see and dispute errors before you apply.
- Set a payment you can affordDecide the most you can pay each month after rent, utilities and food, before looking at offers.
- Look at credit union optionsIf you belong to a federal credit union, ask about a PAL, capped at 28% APR.
- Compare offers by APR and total costCompare APR, fees, payment and total repaid, and skip any lender that asks for money up front.
- Borrow the smallest amount for the shortest termLess principal and fewer months mean less interest. Set up autopay so every on-time payment helps your credit.
Fair credit loan FAQ
Can I get a personal loan with a credit score under 580?
Some lenders make offers to borrowers with scores under 580, but rates are high. In Q4 2025 marketplace data, the average best offer for that group was 29.05% APR. No one can guarantee approval, and a lender that does is a warning sign.
What APR should I expect with fair credit?
In Q4 2025 marketplace data, borrowers with scores of 580–669 saw an average best-offer APR of 25.78% and an average of 27.79% across all offers. Your offer depends on your income, debts and state as well as your score.
Will checking offers hurt my credit?
Lenders in our network typically use a soft credit check to show initial offers, which doesn’t affect your score. If you accept an offer and complete the application, the lender may run a hard inquiry.
What is a payday alternative loan (PAL)?
A small loan offered by some federal credit unions. PALs I range from $200 to $1,000 with terms of 1 to 6 months; PALs II go up to $2,000 with terms up to 12 months. Both are capped at 28% APR.
Does a co-signer help me get approved?
It can, because the lender also considers the co-signer’s credit and income. But the co-signer is legally obligated to repay the loan if you don’t, and missed payments can show up on their credit reports too.
How fast can I improve my credit score?
There’s no set timeline. Fixing a reporting error or paying down card balances can show up after the next reporting cycle, while building a longer record of on-time payments takes months. Payment history makes up 35% of a FICO Score.
Is a loan with no credit check safe?
Be careful. The FTC warns that ads promising loans regardless of credit history, especially ones that ask for a fee up front, are a common sign of an advance-fee scam. Legitimate lenders review your ability to repay.
- LendingTree, marketplace data, Q4 2025
- FICO Score Credit Insights report, Aug 2026
- America’s Credit Unions, Comparing PALs I and PALs II
- Experian, What is a payday alternative loan?
- CFPB, What is a payday loan?
- FTC, What to know about advance-fee loans
- CFPB, What is covered under the Military Lending Act?
- CFPB, What does it mean to be a cosigner on a loan?
- Capital One, What is a credit-builder loan?
- CDIA, Permanent free weekly credit reports, Sep 18, 2023
- myFICO, What’s in my FICO Scores
- National Consumer Law Center, Predatory Installment Lending in the States, Dec 19, 2025
- CFPB, Credit reports and scores
Payment examples are calculated by Riverstone for fixed-rate, fully amortizing loans with on-time payments. The payday example assumes a $15 fee per $100 renewed every two weeks for 13 periods. They are illustrations, not offers.