As with any type of credit, a personal loan can either help or hinder your credit score.
If you take out a personal loan and stick to making your repayments on time each month, over time it can improve your credit score, show you’re a responsible borrower and can give you access to better rates or deals in the future.
However, if you do not keep up with your repayments or pay on time, it can have the opposite effect. Missed or late payments can leave a negative mark on your credit history, making it harder to get credit again in the future.
It’s a good idea to set up a standing order or Direct Debit for your repayments, to make sure they’re paid on time each month.