Will personal loans impact my credit score?

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Will personal loans impact my credit score?

Rounding it up

  • Personal loans can have both positive and negative impacts on credit scores depending on how you manage them.

  • You’ll generally see a decrease in your credit score after applying for a personal loan because most lenders make hard inquiries on your credit report.

  • Managing a personal loan responsibly by making payments on time and in full each month can have positive impacts on your credit score in the long term.

  • Missing even a single personal loan payment can hurt your credit score while defaulting on your loan can have serious negative consequences for your rating over time.

  • Never borrow more money than you can afford to repay, and consult a financial coach if you’re not sure how to best manage your finances.

6 min read

Gaby Pilson
#personal loans#credit score#credit building

Gaby Pilson

Gaby Pilson is a writer, educator, travel guide, and lover of all things personal finance. She’s passionate about helping people feel empowered to take control of their financial lives by making investing, budgeting, and money-saving resources accessible to everyone.

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