Taking out a loan will probably affect your credit, but it can be a positive effect in the long run. Here's what that means: Applying for a new loan often requires a hard credit check, which has an immediate negative effect on your credit score Having the loan itself broadens your credit mix, which has a positive effect Making regular, on-time payments on the loan improves your credit score by establishing a positive credit history Paying off the loan can reduce your credit mix, lowering your score There are some loan products designed just to help improve credit scores, typically called Credit Repair loans.