A image of a credit score scale with a loan application in front of it

Will a Personal Loan Hurt My Credit?

Milad Hassibi June 22, 2018


Personal loans are a great way to get the money you need quickly at a fixed rate. They can be used to pay off high-interest credit cards and to consolidate credit card debt. There is no direct answer to the question if a personal loan can hurt your credit. It could hurt it, and it could increase it.

Personal Loans and Credit

There are 2 major factors that make up your consumer credit: a credit score and a credit report.A image of a man filling out a loan document with a pen Your credit score is a 3 digit number that ranges from 300-850 and is solely calculated from your credit report.

A credit report is a “log” of “transactions” that include both good and bad credit related entries such as on-time payments or repossessions.

How a Personal Loan Can Help Build Credit

Any type of loan can help to increase your credit. If you are a responsible borrower, it will be recognized in your credit score and credit report. If you want a personal loan to build up or increase your score, just make your payments on time and in full.

What’s great about getting a personal loan is that the payments are fixed, so you will know exactly how much you will need to pay and when the payment is due.

How a Personal Loan Can Hurt Credit

Loans can be hard to manage for many consumers. If your job is seasonal and your income fluctuates, it can be hard to come up with the money needed to repay your personal loan. A personal loan can hurt your credit if you become delinquent on your payments or are only making partial payments on the loan itself.

Get a Car Loan with Any Credit Along with a Happy Couple and a New Black SUV next to them

If you are falling behind on your personal loan payments, contact your lender and let them know. You might be surprised to see how willing they are to work with you in order to have you repay the loan. After all, lenders just want to be able to collect the money they loaned out.

Final Note

Personal Loans are a great way to build credit, but they can also harm your credit if you fall behind and begin to miss payments.

If you are looking to get a personal loan, CrediReady can help. Our nationwide network of trusted and verified lenders work with borrowers in all credit situations. Take a moment to fill out our free no-obligation loan inquiry form and get the money you need today!



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