Fair credit, also called “average credit” is that gray zone between poor credit—and the subprime loans that come with it—an

d good credit, where the better credit deals are. You’ll eventually want to move up to good or even excellent credit. But until you do, you’ll have to dig to find the best personal loan deals available for your credit score range.

In this article, we’re going to try to do just that. It is possible to get a personal loan with fair credit, and it’s definitely possible to improve your credit.

The best avenues to get a loan when you have fair credit

Exactly where to get financing when you have fair credit is something of a balancing act. Fair credit means that you are floating somewhere between good credit and poor credit. How your credit will be considered will depend on the institution you apply with, and their own specific credit score requirements.

Banks and credit unions

How successful you will be with these lenders depends on your specific credit score. The credit score range of 580 to 669 is wide and covers a lot of people. Some banks and credit unions may be perfectly willing to make you a loan with a minimum score of 650 or even 620. But a credit score below 620 will be a problem.

Credit unions will generally be better than banks, since they’re nonprofit and member owned. Even so, it will help your cause to have a large savings amount with that institution, otherwise you may need to bring a cosigner.

Peer-to-Peer (P2P) lenders

For personal loans that are unsecured, these may be the best sources. Most will lend up to $35,000, which can be used for any purpose. That can include debt consolidation, medical expenses, financing a business startup, or even purchasing a car. Best of all, they offer financing for nearly all credit scores.

P2P lenders worth checking out include Lending ClubProsper, and SoFi.

Loan aggregators

These aren’t direct lenders, but rather websites that give you access to dozens or even hundreds of different lenders across the country. You fill out a brief application, including the purpose of your loan request, and various lenders will make loan offers. That can save you a lot of shopping around.

A loan aggregator worth checking out is Fiona (formerly Even Financial). You simply complete a single loan request, and the lenders come to you. You can then select which lender will provide the best one for your needs. It will save you the trouble of needing to determine the credit requirements of each lender.

Loan sources to be careful of

Home equity loans

These include home equity loans and home equity lines of credit (HELOCs). They’re excellent loan sources—if you have good or excellent credit. That’s because they are strongly credit score driven. If you’re at the higher end of the fair credit score range, say 640 to 669, home equity loans might be worth a try. But also remember you’ll be putting your house at risk, most likely for debts and obligations that aren’t related to the home itself.

Payday loans

These are more a consideration if you’re on the lower end of the fair credit score range. But you should avoid these entirely. Payday loans are tied to your paycheck, which is where the name comes from. They’re very short-term loans, secured by your next paycheck. You take a loan on that paycheck, at an interest rate that can be over 300 percent.

You also authorize the lender to take an automatic debit from your bank account when your paycheck comes in. It may get you money now, but when your next paycheck comes you’ll be short again. That’s why most people who take one payday loan end up getting caught on the payday loan treadmill. It doesn’t end well for most borrowers.

Getting an auto loan with fair credit

If you have a fair credit, you probably don’t want to get a loan from a car dealer. They’ll almost certainly put you into a subprime loan. I know someone who was put into a six-year loan with a 23 percent interest rate by a dealer. That’s the last thing you need.

The best approach is to apply with your bank. An even better strategy is to use a credit union. Credit unions are member owned, and more likely to make loans that banks won’t. They won’t take poor credit, but they will consider fair credit with extenuating circumstances.

If your credit score doesn’t meet the bank or credit union standards, offer to do one or more of the following:

  • Get a cosigner who has good or excellent credit.
  • Make a large down payment. 20 percent or more could make a real difference because it lowers the lender’s risk.
  • Buy less car than you can afford.

There’s with no standard auto loans source, which means it’s possible to get a decent deal by adjusting the terms.

Getting a mortgage with fair credit

Contrary to popular belief, it’s actually possible to get a mortgage with fair credit. Most mortgage lenders will provide prime level loan rates with credit scores as low as 620. Some will go as low as 600, and a few as low as 580.

Generally speaking, your best mortgage bet with fair credit is an FHA mortgage. They won’t accept poor credit, but they’re more lenient than conventional mortgages.

If you do apply for a conventional mortgage, you might get a better deal if you have some offsetting factors.  These include the following:

  • Making a large down payment—20 percent or more of the purchase price.
  • Having only a small increase in your new house payment.
  • Buy less house than you can afford.
  • Get a cosigner who has good or excellent credit.

Any of these factors can enable you to get a conventional mortgage even with a low credit score.  However, lenders won’t go below a 580 credit score, and not many will go below 620. Check with the lenders in your area that are known to be the most lenient with credit.

If you’re looking for a good site that aggregates the best mortgages online and presents you with the lowest rates, check out LendingTree.

LendingTree can help match you with the right lender based on your needs and credit quality.

Learn more about LendingTree and find the best mortgage for you today! 

Credit cards for people with fair or average credit

The difference between poor credit and fair credit isn’t always obvious with credit card lenders. What’s more, they but don’t typically publish their credit score requirements. That can turn the search for a decent credit card into something of a fishing expedition.

But below is a list of credit card companies known to provide cards for people with fair credit: