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When applying for a form of credit such as a personal loan or credit card, applicants likely have their credit score top of mind. As they review their different credit scores, they may wonder: What’s the difference between a FICO® Score and a credit score?

Put simply, a FICO Score is simply a type of credit score that uses the FICO credit scoring model. A credit score is essentially a generic term, whereas a FICO Score is a credit score created by a specific brand.

What Is a FICO Score?

A FICO Score is a type of credit score that’s created by the Fair Isaac Corporation (FICO). It’s a very popular form of credit score, and many companies rely on it when determining the creditworthiness of applicants.

Not all lenders use FICO Score models though, as some use their own credit scoring models or rely on a score made by one of FICO’s competitors.

Is a FICO Score the Same as a Credit Score?

As we mentioned, the main difference between FICO scores and credit scores is that FICO credit scores are only offered by the brand FICO, as this particular score relies on FICO’s specific credit scoring model. A credit score, on the other hand, is a generic term referring to scores created by any credit scoring model.

Essentially, what many credit scores do is predict how likely someone is to make their debt payments on time. FICO scores specifically predict how likely it is that someone will fall 90 days behind on a payment within the next 24 months. This credit limit is determined based on a complex algorithm that uses information from credit reports made for each consumer by the three major credit bureaus (Equifax, Experian, and TransUnion). FICO occasionally updates how it determines its scores and releases new versions of the FICO Score.

Typically, the higher someone’s credit score is — no matter where the credit score comes from — the higher the credit limit and the less likely they are to miss a debt payment. The more reliable a borrower appears to be based on their credit score, the better terms a lender is likely to offer them. A lower interest rate, for instance, can lead to savings, as demonstrated by this personal loan calculator.

FICO Score vs Credit Score: Which Is Better?

A FICO Score is not inherently better or worse than a credit score. The term credit score applies to the general concept of the score that comes from a credit scoring model. The FICO Score is simply a brand-name version of a credit score.

All lenders get to decide if they want to use their own internal credit scoring models or one from a brand like VantageScore or a FICO credit score. However, none of the different types of credit scores is necessarily better than the other.

FICO vs VantageScore

As briefly noted before, there are other brands that offer other credit scores to lenders. VantageScore is one of FICO’s main competitors. Like a FICO credit score, VantageScore® relies on information from the three major credit bureaus’ credit reports to determine scores.

Both FICO and VantageScore give higher credit scores to more creditworthy individuals, and their credit rating scales range from 300 to 850. Where these two scoring models differ is in how they determine their scores.

There are five categories of information that make up a FICO Score, and each category is given a different weight:

•   Payment history: 35%

•   Credit utilization rate: 30%

•   Length of credit history: 15%

•   Mix of your credit accounts: 10%

•   New credit accounts: 10%

VantageScore, on the other hand, uses six different categories, but doesn’t assign specific weights using a percentage. Instead, VantageScore places a different level of influence on each category:

•   Payment history: Extremely influential

•   Credit utilization: Highly influential

•   Length of credit history and mix of credit accounts: Highly influential

•   Amounts owed: Moderately influential

•   Recent credit behavior: Less influential

•   Available credit: Less influential

Why Is a FICO Score Important and What Is It Used for?

FICO credit scores play an important role when it comes to borrowing money. This is because an applicant’s FICO score indicates how likely they are to make their debt payments on time. The more likely someone is to repay their loan, the less of a risk they pose to lenders.

Because of this, a high credit score is helpful if you want to get approved for a personal loan or a credit card, among other types of loans. Lenders use FICO scores and other types of credit scores to determine how much money to lend someone, how long they have to pay their loan back, and how high their interest rate should be.

What Affects Your FICO Score?

A handful of different factors affect a consumer’s FICO Score. The most important among those is payment history. Someone who consistently makes on-time payments will have a higher score, which is why prompt payment is critical to accessing top credit cards.

The next most important factor affecting a FICO Score is how much of available credit someone is using, also referred to as credit utilization ratio. Using up a lot of available credit indicates to top lenders that a borrower is overextended and may not be able to afford new loan payments.

Someone’s length of credit history also plays a role, and having a longer credit history can help give someone’s FICO Score a boost. Having a good credit mix made up of different types of credit — like installment loans, retail accounts, auto loans, and mortgage loans — is also taken into consideration, as is how recently someone opened new credit.

How Do I Get a FICO Score?

Getting a FICO Score is easy. Consumers typically can access their FICO Score through lenders, credit card issuers, credit bureaus, and select financial institutions.

Because the FICO Score is such a popular credit report, some consumers may want to know what their FICO Score is before they apply for a new form of credit, such as a type of personal loan. That way, they can get an idea of whether they may qualify and under what terms.

The Takeaway

The FICO Score is simply a type of credit score that utilizes a credit scoring model from the brand FICO. Many lenders choose to use the FICO Score when deciding which applicants to lend money to and what terms to offer them — including how much interest to charge them. That being said, some lenders choose to use industry-specific scores, competitor models, or their own internal models to determine who they want to lend money to. Bottom line: Before applying for a personal loan, it’s important to know where your credit score stands.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Why is my FICO Score lower than my credit score?

A FICO Score is a type of credit score. If another one of your credit scores is higher or lower than your FICO Score, it may be because it was calculated using a different scoring model.

What is a good FICO Score?

In general, if your FICO Score is in the mid to high 600s, it’s considered good. If your score falls in the high 700s or 800s, it’s classified as excellent.

Which credit score do most lenders use?

FICO scores are used in the majority of lending decisions — an estimated 90% of lenders use FICO scores to help determine how risky a borrower is. The score is also used to make decisions around interest rates, loan terms, and approvals.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Photo credit: iStock/Lyndon Stratford

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q225-007

Personal loan amounts can range from $1,000 to $100,000 depending on the lender and your qualifications. These loans can offer flexible funding for an array of uses, such as home improvement projects or debt consolidation.

Whether you’re looking for a large personal loan or a small one, the lending criteria is usually the same. Here, learn more about how much lenders typically offer, what factors play into the size of a personal loan that you can get, and when it makes sense to get a personal loan.

How Much Do Lenders Offer?

How much can you get for a personal loan? Amounts vary by lender, but typically start at $1,000 and go as high as $100,000.

The amount you actually get approved for depends on a handful of criteria, which you’ll delve into in more detail below.

Recommended: Typical Personal Loan Requirements

What Determines How Big of a Personal Loan You Can Get?

The amount a lender offers and the amount you qualify for aren’t always one and the same. There’s a handful of financial and credit criteria that can impact the loan amount, rates, and terms. The main factors are as follows:

Credit Score

In general, the higher your credit score, the larger the loan amount, and the more favorable the terms and interest rates. On the flip side, the lower your credit score, the smaller the loan amount, and the less favorable your terms and interest rates.

Lenders usually have credit score requirements. The minimum required credit score for a personal loan varies but can start at 580. To get the best terms and rates, you usually need a credit score of at least 700.

Recommended: Can a Personal Loan Hurt Your Credit?

Debt-to-Income Ratio

Your debt-to-income ratio (DTI) is your monthly debt payments divided by your gross monthly income. It’s expressed as a percentage. For example, say your monthly income (before taxes, withdrawals, and other deductions are taken out) is $10,000, and your total debt obligations are $4,000. In that case, your DTI is 40%.

For the most part, lenders would like to see a DTI no higher than 35% to 42%. But if you have a high credit score, you might get approved with a slightly higher DTI.

Lender Amount Limits

The amount you can borrow may be limited by how much funding you can receive from your lender. If your credit is stellar, you have low DTI, steady employment, and a good income. But if the lender’s max personal loan amount is $50,000, then the most you can potentially borrow is $50,000.

Applying as An Individual or Jointly

If you’re applying for a personal loan with another applicant and their credit is strong, you might be eligible to borrow more money than you would be if applying solo. However, not all lenders let you apply jointly, so you’ll want to check beforehand.

Income and Employment History

How much you can borrow also depends on your income and employment history. If you bring in a certain amount of money and have steady work for the last few years, that could boost the approval amount.

Some lenders may give more weight to your income and employment history. If yours are excellent, you might be able to get a higher loan amount with a lower credit score and a higher debt-to-income ratio.

Minimum Income Requirements

There typically isn’t one single minimum income that is required for a personal loan. The amount needed will depend on a variety of factors, such as the amount of funding you are seeking (higher figures mean more income is likely required) and your credit history. The lender wants to feel secure that you are going to be able to repay the loan.

Collateral

Not all personal loans require you to provide a valuable asset, such as your home or car, to back up the loan. But if you’re looking into a secured loan, you might be able to get a higher max amount on your personal loan than if you went the unsecured loan route.

Using collateral and getting a secured loan means you could get a bump in your personal loan amount. Remember, not all lenders offer secured personal loans. If a lender does offer both secured and unsecured loans, you can compare quotes from the same lender for either option.

Loan Purpose

A lender might only allow you to use the loan for certain purposes. For instance, some lenders specialize in credit card debt consolidation loans. Lenders that offer greater flexibility might have limits on how much you can borrow depending on the loan purpose.

For example, the limit on using the loan proceeds for childcare expenses and large purchases might be different than if you’re planning to use the funds toward a major home improvement project.

Calculating How Much You Can Borrow

Determining how much you can borrow requires you to know your financial situation, how much you’d like to borrow, and what you can reasonably afford to pay off on a regular basis.

To start, jot down the repayment term and rate you anticipate receiving. If you get prequalified, that can give you a fair estimate on your loan amount.

Next, you’ll want to figure out the following numbers:

•   Income before taxes

•   Additional income you get on a regular basis (i.e., rental property income, alimony, disability benefits)

•   If you’re filing jointly, you’ll also need to include the other applicant’s income and other details

•   Tally up your existing debt. This might include credit card debt, other personal loans, a car loan, or student loan debt.

That can help you figure out how much you can afford for your monthly payment.

How to Calculate Your Borrowing Power

If you’re mulling over the possibility of debt consolidation, you want to gauge how much you’d save on interest or how much your monthly payment will be lowered by rolling over your existing debt to a new one.

You can break out a calculator and punch in basic numbers, such as the loan amount, interest rate, and repayment term, to figure out what your monthly payment shakes out to.

Online Loan Calculators and Prequalification

Another option: Let tech do the work for you. You can use a handy personal loan calculator to simplify this process and perhaps comparison-shop a bit using online tools.

You may find that you can prequalify for a loan online, too, which gives you a picture of what you might qualify for in terms of loan amount and interest rate. This is not a binding agreement and doesn’t involve a hard credit pull, but it can help you approximate what options may be available.

Recommended: Pros and Cons of Personal Loans

Does a Personal Loan Make Sense?

Personal loans do have the word “personal” in them. So whether it makes sense for you to take out a personal loan depends on your unique situation and circumstances.

Here are some scenarios where getting a personal loan might be a good idea:

•   You need a large sum upfront. If you need a chunk of cash for a big-ticket purchase or to fund a home renovation, a large personal loan can provide you with the money to cover a purchase.

•   You have a good credit score. The higher your score, the higher the loan amounts and the better your rates and terms will most likely be.

•   You’re using the funds for something you really need. If you need the money to cover a financial shortfall, unexpected emergency, or much-needed home remodeling project, it could be a sound move to take out a personal loan.

•   You need the money quickly. The processing and funding times for a personal loan can be a lot faster than other funding choices, such as a home equity loan or home equity line of credit, or HELOC.

•   You want to consolidate high-interest debt. If you qualify for a lower interest rate, lower monthly payments, and more flexible repayment terms, it could make financial sense to take out a debt consolidation loan.

When a Personal Loan May Not Be the Best Option

Now, consider instances when a personal loan may not make sound financial sense:

•   You can’t keep up with monthly payments. If you’ve looked at your situation, done the math, and realized that you’ll have a hard time staying on top of your monthly payments, then a personal loan might not be the right choice for you at the time.

•   You have time to save for your major purchases and goals. If you aren’t in a financial pinch and don’t need the money right away, you might be better off saving the amount needed instead. That can allow you to sidestep paying interest.

•   You don’t need to take out a large amount of money. Unless you have good reason to take out a sizable amount of cash, then it probably doesn’t make financial sense to get a personal loan. Other options, such as a personal line of credit, might be a better move.

Alternatives to Personal Loans

If you’re on the fence about taking out a certain type of personal loan, know that other options exist. Here are other routes to take:

Credit card. If you’re already shouldering a lot of credit card debt and are paying a lot in interest fees, this might not be the best choice for you. But if you need to borrow a small amount — and can reasonably pay off your balance in a short amount of time — then a credit card can provide easy access to funding.

Personal line of credit. Don’t need a lump sum upfront and anticipate needing to tap into funds for different purposes? Then a personal line of credit, which is similar to a credit card, might be a better fit.

Peer–to-peer loan. If you’re struggling to qualify for a personal loan with a traditional lender, you might have better odds of getting approved for a peer-to-peer (P2P) loan. Instead of being funded by a financial institution, P2P loans are funded by individuals who serve as investors and are loaning the money. The lending criteria for P2P loans tend to be less stringent than traditional loans.

Home equity loan or home equity line of credit (HELOC). If you’re a homeowner who has built equity in your home, you could qualify for a home equity loan or home equity line of credit (HELOC). Because you are offering your home as collateral, you typically can qualify for higher loan amounts. Plus, home equity loans or HELOCs tend to have less stringent lending criteria.

If possible, consider waiting to take out a personal loan until you’ve worked on building your credit, reduced your debt loan, are earning a higher income, or have a more stable employment history.


💡 Quick Tip: Just as there are no free lunches, there are no guaranteed loans. So beware lenders who advertise them. If they are legitimate, they need to know your creditworthiness before offering you a loan.

The Takeaway

How much of a personal loan you can get depends on a handful of factors, such as what’s available from the lender, your credit score, debt-to-income ratio, and employment history. Plus, it’s important to get your head around what you can reasonably afford to pay each month.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What is the maximum personal loan amount?

Most lenders offer a maximum personal loan amount of $50,000 to $100,000. But just because a lender offers that doesn’t mean you’ll get approved for it. You’ll also want to be mindful about not taking on more than you need and can pay back on time.

How much is too much to ask for a personal loan?

There’s no specific number that constitutes “too much” for a personal loan, up to the maximum which is typically $100,000. That said, an amount might be considered too high if you don’t have a good reason to take out that much money and if you aren’t able to afford the monthly payments.

Does the size of a personal loan affect a credit score?

As your personal loan payments are reported to the three major credit bureau agencies, the size of your personal loan can impact your credit. For example, your payment history is the largest contributing factor, and if you take out too large a loan and struggle to make payments on time, that can negatively impact your score.

Can I get a personal loan if I have existing debt?

Yes, it’s possible to get a personal loan if you have existing debt. Prospective lenders will review your ability to repay the personal loan and see whether you’ve handled debt responsibly in the past. An example of getting a persona loan with existing debt could be a mortgage holder getting a personal loan to buy new furniture.

How can I increase my chances of getting approved for a larger loan?

You may be able to increase your chances of getting approved for a larger loan by building your credit score, increasing your income, shopping around with different lenders, and having a co-applicant or co-signer on the loan.

Photo credit: iStock/Ridofranz

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q225-026

A financial coach works with clients to help them better manage their money and to develop healthy, long-lasting, finance-related habits.

If you need help getting your finances organized or setting up a plan to effectively work towards your financial goals, you might benefit from the help of a financial coach. These professionals can help clients pay off debt, create an emergency savings fund, stabilize their finances, and develop an overall financial plan.

Unlike financial advisors, financial coaches generally spend more time helping their clients understand the fundamentals of finances, rather than recommending investments and managing their investment portfolios.

Read on to learn more about financial coaches, what they do, how much they cost, and how to find one.

What Does a Financial Coach Do?

According to the Consumer Financial Protection Bureau, a financial coach is a trained professional who collaborates with and guides their clients to reach their financial goals, including:

•   Better money management skills

•   Improved savings, debt levels, and credit

•   More financial confidence

Financial coaches typically individualize their approach based on the needs of each client, with the goal of helping them make progress in the area of their financial life that they identify as most important. For example, a financial coach might help you reach your financial goals by teaching you how to build savings, avoid overspending, or pay down debt.

Financial coaches also often assist their clients with the behavioral and emotional components of managing money. A coach can help you uncover what drives your financial decisions, so you can create a healthier attitude that leads to better money habits.

Coaches often work with their clients over the period of several weeks to several months and may meet weekly or biweekly to provide advice and check on progress. The full coaching process may include:

•   Building awareness around spending habits (usually by tracking daily, weekly, and monthly spending)

•   Defining the client’s financial goals

•   Developing a budget and a financial plan to achieve those goals

Accountability is also typically built into the process. So rather than managing a person’s finances, a financial coach gives clients the tools to help make informed and responsible financial decisions.

What a financial coach can’t do: offer investment recommendations or help clients manage their investment portfolios. While coaches can provide basic advice on the concept of investing, they are not licensed to provide financial advice like financial advisors are, and therefore cannot provide specific product recommendations.

💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

How Much Does a Financial Coach Cost?

Coaching rates typically run between $100 to $300 an hour. But because of the wide range of fees charged by coaches, it’s a good idea to ask about costs upfront.

Unlike financial advisors, who typically charge their fees based on a percentage of the assets under management, financial coaches generally work on a fee-only basis. Some may charge a flat fee based on how long you plan to work together (such as three or six months), while others might charge per session.

How do I Find a Financial Coach?

While there is no required coursework or license, and there are no certifications to become a financial coach, there are training programs run by the Association for Financial Counseling and Planning Education (AFCPE).

You can begin looking for financial coaches in your area at AFCPE.org. It’s also a good idea to ask for personal referrals from friends and family, as well as other financial professionals you know or work with (such as an accountant or financial advisor).

Before selecting a coach, it can help to consider specifically what you are looking for in a financial mentor. This can involve thinking about your own financial strengths and weaknesses, and what your goals are. Are you, for example, struggling to save enough money for a down payment on a house? Or, do your credit card balances keep going up? Identifying your needs can help you suss out the best coach for your situation.

Once you’ve gathered a list of financial coaches, you may want to reach out to each candidate to get a sense of their personality, methods, and coaching style.

Some questions to consider asking:

•   How long have you been a coach?

•   What’s your business specialty?

•   How long do you typically work with clients?

•   What’s your plan to help me reach my goals?

•   What is your availability?

•   What are your fees?

💡 Quick Tip: If you’re faced with debt and wondering which kind to pay off first, it can be smart to prioritize high-interest debt first. For many people, this means their credit card debt; rates have recently been climbing into the double-digit range, so try to eliminate that ASAP.

The Takeaway

Maybe you’ve tried to make a budget but just can’t stick to it. Or perhaps you’ve run up so much debt between credit cards and loans that you don’t know the best way to pay it off. A financial coach can help you structure your budget, build a financial plan, and hold you accountable throughout the process.

Financial coaches also help clients understand and work through deep-seated emotions around money that may be preventing them from being “good with money,” building up savings, and reaching their financial goals.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What Exactly Does a Financial Coach Do?

A financial coach helps you set and achieve financial goals by providing personalized guidance and support. They assist with budgeting, debt management, setting goals, saving, and investing. Coaches often work one-on-one, offering accountability and motivation to help you make informed financial decisions and improve your overall financial health.

What Is the Average Cost of a Financial Coach?

The average cost of a financial coach ranges from $100 to $300 per hour, depending on the coach’s experience and the services offered. Some coaches offer package deals or flat rates, which can be more cost-effective. Shop around and compare prices to find a coach that fits your budget.

What Is a Financial Coach Not Allowed to Do?

A financial coach is not allowed to manage your investments, provide legal advice, or act as a fiduciary. They cannot make financial transactions on your behalf or offer specific investment recommendations. Their role is to provide guidance and support, not to handle your money directly.

What is the Difference Between a Financial Coach and a Financial Advisor?

A financial coach focuses on behavior and mindset, helping you set and achieve personal financial goals through accountability and support. A financial advisor, on the other hand, provides professional advice on investments, retirement planning, and wealth management. Advisors often manage your investments and offer more technical financial planning services.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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See additional details at https://www.sofi.com/legal/banking-rate-sheet.
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SOBNK-Q225-049

Renting out part, or all, of your home on a rental platform can be a lucrative sideline. Just keep in mind that it can take an investment of time, effort, and money to create and maintain a welcoming space for guests. And the plan could potentially backfire if you side-step some key legal and insurance steps.

To help ensure your venture is a success, here are some things you may want to consider before you start renting on Airbnb or a similar site.

1. Understanding Local Rental Laws

Before listing your home on a home-sharing site, it’s a good idea to research and make sure you fully understand local laws regarding renting out your home.

Laws that govern home shares vary around the country. In some cities, for instance, it’s illegal to rent a home as an Airbnb unless it’s your primary residence. In others, hosts can only rent out a portion of their home, and must be present during the guests’ stay. Laws about short-term rentals are also constantly changing.

If you own a condo or belong to a HOA, there may be other legal hoops to jump through, since you will likely need to get permission before opening your doors.

2. Checking With Your Landlord (if You’re Renting)

Looking to rent out a room in your home you rent? It can be wise to first carefully read through your own rental agreement.

Leases and agreements can contain language barring renters from subletting the home outright or without the express consent of the landlord. If you’re unsure even after reading the fine print, you may want to have a conversation about it with your landlord.


💡 Quick Tip: Help your money earn more money! Opening a high-yield bank account online often gets you higher-than-average rates.

3. Talking to Your Neighbors

While neighbors can’t tell you what you can and can’t do on your own property, they can make things difficult for you.

Prior to renting out your home, you may want to do the neighborly thing and pop in or give them a call to let them know what you are planning and do your best to ease any of their concerns. Who knows — they might even end up keeping an eye on the property for you while you’re away.

4. Being Prepared to Pay Taxes

Sure, renting your home on Airbnb may bring in a nice source of passive income. Like all income, however, this may be subject to state and federal taxes.

According to the IRS, third-party settlement organizations (like Airbnb and other vacation rental host sites) are required to issue a Form 1099-K when the amount of total transaction payments exceeds $2,500 in tax year 2025 and $600 in tax year 2026 and beyond.

5. Considering All the Expenses Involved in Renting

While it may be more fun to think about the extra income that could result from your home rental, it can also be important to think about all the expenses involved.

For example, you may have to purchase items to get the space ready, along with any amenities you will offer guests (like toiletries or coffee), and cleaning supplies (or, pay for a cleaning service), and more.

You may want to make a list of all your potential expenses and consider how it will affect your potential profits.


💡 Quick Tip: If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.

6. Finding a House Manager if You’d Rather Not do all the Work

Does managing your listing, bookings, and maintaining your rental property sound like a lot? You might consider hiring a manager to do it for you.

There are a number of property management companies around the country. that specialize in managing short-term home rentals.

These agencies will handle everything from writing (or boosting the exposure of) your listing to communicating with guests to cleaning and taking care of repairs. Some charge a commission (i.e., a percentage of bookings), while others charge a flat monthly service fee.

7. Making Space for Guests

Prior to accepting your first guests, it’s a good idea to make sure you have room for them — and that typically means more than just a clean, freshly made bed.

You may also want to offer some empty drawers so that guests can unpack their clothing, and possibly also a free shelf in the bathroom for their toiletries.

8. Putting Away Valuables

While it’s nice to think that everyone is trustworthy, that may not always be the case. It can be a good idea to safely stow away any valuables when you are opening your home to people you don’t know.

You can do this by getting a heavy-duty safe. Or, you might want to lock off one room of the home as an “owner’s closet” that guests cannot access.

9. Checking With Your Insurance Company

Airbnb offers its hosts its own liability insurance. Though this covers a wide array of potential issues, including bodily injury to guests and any damage to the property, it may not cover everything. Plus, different home rental platforms may offer different levels of insurance coverage.

It can be a good idea to also check in with your own homeowners or renters insurance to see what type of coverage these policies offer.

10. Writing a Detailed Description

Ready to list? When it’s time to write a description of your home, it’s a good idea to make your listing as detailed as possible, and even include the flaws of your home. A home need not be perfect to list on Airbnb. However, the company suggests that honesty is the best policy.

It can be a good idea to tell guests exactly what they’ll find when they arrive, as well as highlight your home’s special features, such as the location or unique amenities of your space. For more ways to make your listing stand out, you may want to check out Airbnb’s “writing tips.”

11. Taking High Quality Photos

Before taking photos of your space, you may want to spend some time arranging everything as if you were getting ready to welcome your first guest. This can help showcase your space to its best advantage, and also help set your guests’ expectations before they book.

It’s also a good idea to shoot in landscape format (photos in search results are typically displayed in landscape, so vertical photos won’t showcase your space as well), shoot in the middle of the day when there is plenty of light, and to highlight any unique features or amenities.

12. Creating an Information Binder

It can be helpful to make a packet of information for your guests which includes key information, such as the Wi-Fi password, your contact number, and house rules (such as check-out time and anything that guests need to take care of before they leave).

You may also want to include instructions on how to work on anything quirky, such as the television or coffee maker, as well as local entertainment and restaurant options.

13. Offering A Few Extra Amenities

There are millions of listings on Airbnb. If you’re hoping that your rental will make financial freedom a reality, you’ll want it to stand out from the crowd.

Throwing in some extras can help encourage guests to choose your home over others. Are you near a popular beach? You may want to consider keeping some beach chairs and sand toys stored in the garage for guests to use.

Simple add-ons, like the use of your bicycles or a parking tag, may not cost you much (or anything) to offer, yet significantly increase the popularity of your listing — along with your earnings.

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14. Making a Decision about Pets or No Pets

Before you list your property it’s a good idea to decide if you want your home to be a space for pets or not.

This is a personal decision, but you may want to consider whether or not your space is well-suited for pets (a light suede couch, for example, might not last very long). If you do decide to make your home pet-friendly, you could add in an additional fee for cleaning.

15. Learning How to Price a Property Right

You may think your home looks and feels like a million bucks, but that doesn’t mean travelers will pay a premium.

To understand how to price an Airbnb listing correctly, it’s a good idea to comb through comparable listings in your area to get a sense of what other people are charging.

You can also use a free online calculator like airDNA. You just need to input all your data, including home size, if it’s pet-friendly, location, etc., to get a recommended price for your listing.

Recommended: 33 Ways to Make Income From Home

16. Deciding How You Want to “Screen” Guests

It is against Airbnb’s nondiscrimination policy to decline a booking based on “race, color, ethnicity, national origin, religion, sexual orientation, gender identity, or marital status” or impose different standards for specific guests.

What hosts can screen for are people who may not be a good fit for their property by being as descriptive as possible in their listing. If your home is not a good fit for children, you may want to make that clear in your listing.

Do you want to limit the noise after specific hours to respect neighbors? You may want to be specific about that in your listing so you bring in the type of customer you are hoping to attract.

17. Learning About Enhanced Cleaning Standards

Airbnb, along with many other rental platforms, require hosts to use an enhanced five-step cleaning process between guests.

The protocol includes special measures, such as using disinfectants approved by your local regulatory agencies for use against Covid-19 on all high-touch surfaces (and letting them stand for the amount of time specified on the label) and washing all dishes and laundry at the highest heat setting possible.

18. Thinking About Turnover Time

Before you rent all or part of your home on a rental platform you will want to think about not only when you want to rent your home out, but also how long it will take you to get it properly cleaned (using the five-step protocol) and ready for the next guests.

Will you need 24 hours between guests or can you get the home ready in just a couple of hours? This will determine exactly what dates you are able to accept guests, as well as what check-in time you want to put in your listing.

19. Testing Your Rental With Friends

When you’re getting close to listing your space, you may want to try testing out the system with a few friends.

Inviting people you know and trust to rent your space (free of charge or for a low fee) won’t do much to get that extra income stream flowing, but it can help you work out the kinks, as well as garner you some (hopefully positive!) reviews.

Friends can also tell you honestly what you might do differently or change to improve the rental experience. This way, you’ll feel confident once people you don’t know arrive.

20. Being Ready for Bookings Right Away

With millions of users all over the world, it may be a good idea to go into listing your property believing you’ll receive guests right away.

While this may not happen, it’s better to be prepared for visitors, then wait to see how your listing performs before readying your space for guests.

21. Looking At Your Reviews

After guests depart they may leave you a review of their stay. It’s a good idea to not only look at the reviews but to take them to heart. Reviews can make or break Airbnb rentals.

While it can be tough to digest criticism of your home, if guests complain about something that can be easily fixed, it can be in your best interest to fix it.

Reading positive reviews can be a good way to see your rental from an outsider’s perspective and make changes to improve your listing.

22. Accepting the Fact You Can’t Please Everyone

Sometimes, people are just difficult, or nitpicky, or just aren’t the right match for your listing and will leave a nasty review that feels unwarranted.

If you see a review that falls into that camp, it can be wise to just forget it and move on. This can often be a better approach than starting a fight in the comment section, which may only end up making you look bad to potential future guests.

23. Working Toward Superhost Status

Becoming an Airbnb superhost can increase your earnings by giving your more visibility and letting guests know that they can expect the best when staying with you.

Superhosts are featured in search results and get a Superhost badge on their profiles and listings to help them stand out. After each year as a Superhost, they’ll get a $100 travel coupon.

To become a Superhost, hosts must complete at least 10 stays in the past year (or 100 nights over at least three completed stays), have a 4.8 or higher average overall rating, respond to 90% of new messages within 24 hours, and cancel bookings less than 1% of the time.

Recommended: Money Management Guide

24. Deciding If Airbnb Is the Only Platform for You

After deciding to list on Airbnb, it’s then time to decide if that’s enough. There are, after all, a number of other home rental platforms to choose from, including Vrbo, Booking.com, and Flipkey. It’s up to you how many different listings you’re willing to maintain.

25. Keeping Your Calendar Up to Date

Once you list your home on Airbnb (or any other rental platform), it can be wise to keep your rental calendar as up-to-date as possible. This way, guests don’t accidentally book a stay when you have your in-laws visiting or when you otherwise want to use your own space.

If a date looks to be free to a potential guest but you forgot to mark it as unavailable, it can become a frustrating experience for both parties.

The Takeaway

If you have an extra room, or your home is vacant for several months out of the year, you may be tempted to list it on a home rental site.

But before you start posting photos on Airbnb, there are several things you may want to think through — from legal and insurance issues to the time and expense involved in getting (and keeping) your space ready for guests.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What should you know before renting your home on Airbnb?

Before renting your home on Airbnb, it’s important to understand local laws and regulations, as some areas have restrictions on short-term rentals. It’s also a good idea to check your homeowner’s insurance to ensure it covers Airbnb rentals, and carefully read Airbnb’s host liability coverage. Finally, you’ll want to familiarize yourself with Airbnb’s host policies and prepare your home for guests by ensuring it’s clean, safe, and well-stocked with essentials.

Do I Need Permission to List My House on Airbnb?

Yes, you may need permission to list your house on Airbnb. Check your local laws and regulations, as some cities and neighborhoods have restrictions on short-term rentals. If you rent rather than own your home, you’ll want to review your lease agreement, as it may prohibit subletting or short-term rentals. Additionally, consult your homeowner’s association (HOA) if applicable, as they might have specific rules. Always ensure you have the necessary permits and approvals to avoid legal issues and fines.

Is Renting out an Airbnb Worth It?

Renting out an Airbnb can be worth it if you manage it effectively. It can provide a steady income stream, especially in high-demand areas. However, it requires significant effort, including maintaining the property, managing bookings, and dealing with guest issues. It also comes with costs, such as cleaning, utilities, and potential wear and tear. You’ll want to weigh the benefits against the time and financial investment. If you enjoy hosting and are willing to put in the work, however, it can be a rewarding venture.

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Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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