Applying for a personal loan can negatively affect your credit score since it adds an inquiry to your credit report.
Taking out the loan can also hurt your score by increasing your debt-to-income ratio; however, making regular payments on the loan can help improve your score over time.
Does applying for a bank loan affect your credit score?
Once you’re approved for a loan, it’s important that you make your monthly payments on time. Your loan payments will have a significant impact on your credit. Even a single missed payment can hurt your credit score.
Photo in the article by “Wikipedia”