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How Does a Personal Loan Affect Your Credit Score?

A personal loan can both help and hurt your credit. The key is understanding why — and by how much — your score will be impacted.

Author
By Devon Delfino

Written by

Devon Delfino

Freelance writer

Devon Delfino is a personal finance writer with over eight years of experience. Her work has been published by U.S. News & World Report, CNN, and The Motley Fool.

Edited by Barry Bridges
Barry Bridges

Written by

Barry Bridges

Editor

Barry Bridges is the personal loans editor at Credible. Since 2017, he’s been writing and editing personal finance content, focusing on personal loans, credit cards, and insurance.

Reviewed by Meredith Mangan

Written by

Meredith Mangan

Senior editor

Meredith Mangan is a senior editor at Credible. She has more than 18 years of experience in finance and is an expert on personal loans.

Updated March 31, 2025

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

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Personal loans can either help or hurt your credit, depending on a variety of factors. A personal loan can help you build credit in the long run if you manage your debt responsibly, and can even lower your credit utilization ratio, in the case of debt consolidation.

But things like a new inquiry on your report — or, more crucially, things like missed payments — can bring your score down. Knowing how a personal loan impacts your score can help you determine if one is right for you.

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