Frequently Asked Questions(FAQ)

How much will my credit score drop with a personal loan?

Applying for a personal loan will result in a hard credit pull that can have up to a five-point impact on your credit score. However, new credit applications can be good, too, and account for 10% of your credit score.

What credit score is needed for a personal loan?

To qualify for a personal loan, borrowers typically need a credit score of at least 600 or 610. However, a higher score will mean better loan terms and lower interest rates. As a result, you should see your credit score start to climb. If your credit score is fair to poor, it might be best to improve it before applying for a personal loan. Take time to focus on your payment history and drive down your utilization.

What credit score do you need to buy a house?
How often should you check your credit score?

Your credit score can fluctuate monthly. If you can do so, check your credit score monthly. And annually, access a copy of your free credit report and check closely for any inaccuracies. If you see anything that has you scratching your head, be sure to file a dispute.

How long do personal loans stay on your credit?

Generally, credit accounts that are paid off and in good standing will remain on your credit report for up to 10 years after closing. Keeping credit lines open after paying them off is recommended, rather than closing them, as this can help your credit utilization and add to your credit history.

About the Authors

Ann Bloomquist

Written by: Ann Schreiber

Seasoned Copywriter & Content Marketer

Ann have been a marketer and a content writer for over 20 years. She have worked for financial institutions such as FICO, Experian, and BlueChip Financial as a director of content and brand marketing.

More about me

More About The Effect of Personal Loans on Credit Score

Show More