Installment loans do not hurt your credit, as long as you make your monthly payments on time. According to Experian, each loan on your credit report gives you a more robust credit history. Making payments on time will help your credit score because it shows that you can manage debt responsibly.  Before you get too excited, however, understand that they will not increase your score instantly, nor by a lot. When a lender pulls your credit report, you will probably see an initial dip in your score by a few points, and the increasing debt-to-income ratio may also drop your score additional points initially. So boosting your score with on-time installment loan payments can take several months.