Yes, if you repay your loan on time, the positive feedback will be sent from the lender to the main credit reference agencies and the guarantor loan will improve your credit score. This is why a guarantor loan helps those with bad credit to demonstrate their creditworthiness and get their finances back on track.
However, if you fail to repay your loan on time, the information will still be sent back to the credit reference agencies. It will say on your file that you defaulted on a loan and this will cause your credit score to worsen.