How to Improve Your Credit Score for a Personal Loan

If you’re considering a personal loan to fund a home improvement project, your credit score will play a key role in determining your loan options. A higher score can unlock better rates, more flexible terms, and faster approvals. Fortunately, improving your credit score is absolutely possible with the right steps—and it doesn’t have to take years to see results.

In this article, we’ll walk you through how to prepare your credit for a loan application, what a good credit score for a personal loan looks like, and what lenders may be looking for when you apply.

What is a good credit score for a personal loan?

Lenders typically use your credit score to gauge how likely you are to repay a loan. Most will consider the following score ranges:

• Excellent (720 and above) – May qualify for the lowest rates and highest loan amounts
• Good (660–719) – Often eligible for favorable terms with competitive rates
• Fair (600–659) – May still qualify, but with higher interest rates
• Poor (below 600) – Limited options; approval may require a co-signer or added conditions

While the average credit score for a personal loan varies by lender, many borrowers approved for competitive offers fall within the 660–720 range. That said, the lenders we work with at HFS Financial use a more holistic view—including income, debt-to-income ratio, and overall credit history—not just the score alone.

Steps for improving your credit score

If your credit needs a little work before applying, these strategies can help strengthen your profile:

1. Review your credit reports: Start by checking your reports from all three major bureaus—Equifax, Experian, and TransUnion. Look for errors, outdated accounts, or inaccurate information. You can request a free credit report at AnnualCreditReport.com (the only site authorized by the U.S. government) or learn more at USA.gov/credit-score.
2. Pay bills on time: Your payment history makes up the largest portion of your credit score. Even one missed payment can have a negative impact. Set up automatic payments or calendar reminders to stay on track.
3. Lower your credit utilization: Keep credit card balances low—ideally below 30% of your available limit. If you’ve recently paid off a large balance, wait a month for your lower usage to reflect on your credit reports.
4. Avoid opening too many new accounts: Multiple credit inquiries in a short period can temporarily lower your score. If you’re preparing to apply for a personal loan, limit new credit card or financing applications during that time.
5. Maintain older accounts: The length of your credit history also matters. Don’t close old accounts, even if you’re not using them—they add depth to your credit profile.

For more in-depth strategies, Experian provides a helpful resource on how to improve your credit score.

Applying for a personal loan with confidence

Once you’ve taken steps to strengthen your credit, you’ll be in a better position to qualify for a loan that fits your needs. At HFS Financial, we connect homeowners with fast, flexible financing for a wide range of home improvement projects—and checking your rate won’t affect your credit score.

We look at more than just your credit score, so even if you’re still working on improving it, you may be closer to approval than you think. Use our Check My Rate tool today to find out more.