Your current debt load accounts for nearly a third of your credit score. When you take out a loan, your overall debt increases, which could lessen your credit score. Any decrease you see will disappear over time as you make on-time payments and pay down your total balance. On the other hand, a new loan can increase your credit mix. Lenders like to see that you can responsibly manage multiple loan types, so this could work in your favor. Other types of loans — mainly revolving credit cards — can give an instant boost to your credit score. That’s because adding a new credit line improves your credit utilization. Lenders calculate your credit utilization by dividing your current credit card balance by your overall credit limit. For example, a credit card with a $2,000 limit and a $500 balance has a 25% utilization rate. Your credit score improves when you keep this number low. So, when you add a new credit card, you’re expanding the amount of available credit at your disposal. As long as you don’t run up several charges on your new card, you will lower your utilization and improve your credit score.