How much does a hard pull lower your credit score?

A hard pull typically lowers your credit score by 5 to 10 points. The impact diminishes over 12 months and the inquiry falls off your report entirely after 2 years. The on-time payment history from the loan itself builds back far more than the hard pull cost within 6 to 12 months.

How Does a Personal Loan Affect Your Credit Score? 2026

Q: How does a personal loan affect your credit score?

A personal loan affects your credit score in several ways. Applying with a soft check at Money247.com has zero impact. Accepting a loan causes a hard pull drop of 5 to 10 points temporarily. On-time monthly payments build payment history — the #1 factor in your score. Paying off credit card debt with a consolidation loan reduces utilization — the #2 factor. Net result: most borrowers see score improvement within 6 to 12 months.

Q: Does getting a personal loan hurt your credit?

Short-term yes — the hard pull at acceptance drops your score 5 to 10 points temporarily. Long-term no — on-time monthly payments build your payment history and improve your score month over month. Most borrowers see a net positive credit impact from a personal loan within 6 to 12 months of consistent payments.

Q: How long does a personal loan stay on your credit report?

An open personal loan remains on your credit report as an active account as long as it has a balance. After you pay it off it remains on your report as a closed account in good standing for 10 years — continuing to positively influence your credit history.

Last updated: · Reviewed by Money247 Editorial Team

✅ Quick Answer — Net Positive for Most Borrowers

Checking your rate is zero impact (soft check). Accepting a loan causes a temporary 5 to 10 point hard pull drop. Making on-time monthly payments builds payment history — the #1 factor in your score. Most borrowers see a net positive credit score impact within 6 to 12 months of consistent payments.

Every Way a Personal Loan Affects Your Credit Score

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On-Time Payments — Biggest Positive Impact

Payment history is the #1 factor in your FICO score at 35%. Every on-time monthly payment on your personal loan reports positively to all 3 credit bureaus — Equifax, Experian, and TransUnion. 12 months of perfect payment history can raise your score 30 to 80 points depending on your starting score and credit history.

✓ Major positive — builds score every month

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Reduced Credit Utilization — Immediate Boost for Consolidation

If you use a personal loan to pay off credit card debt your credit utilization ratio drops immediately — often dramatically. Utilization is the #2 factor at 30% of your score. Reducing utilization from 60% to 10% can raise your score 20 to 60 points within one billing cycle. This benefit is instant and significant.

✓ Immediate score boost when paying off cards

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Improved Credit Mix

Having both revolving credit (credit cards) and installment credit (personal loan) is considered a healthy credit mix — worth 10% of your FICO score. If you only have credit cards adding a personal loan improves your mix and positively impacts your score.

✓ Minor positive — adds installment credit to your profile

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Hard Pull at Acceptance — Temporary Drop

When you formally accept a loan offer the lender performs a hard credit inquiry. This typically drops your score 5 to 10 points temporarily. The impact diminishes over 12 months and disappears from your report entirely after 2 years. The on-time payment history quickly outweighs this temporary cost.

✗ Small temporary negative — recovers within months

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Increased Total Debt — Temporary Negative

Adding a personal loan increases your total debt balance which is a minor factor. However for consolidation loans the simultaneous payoff of credit cards can offset this entirely — the utilization reduction often outweighs the debt increase.

✗ Minor temporary negative — offset by utilization improvement if consolidating

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Rate Shopping at Money247.com — Zero Impact

Checking your rate at Money247.com uses only a soft credit inquiry — not a hard pull. Your score is never affected during the comparison phase. Hard pull only occurs when you formally accept a specific offer from a lender.

✓ Zero impact — safe to check your rate anytime

Credit Score Impact Timeline — Personal Loan

Application

Soft Check at Money247.com — Zero Impact

Rate shopping uses soft check only. Score unchanged. Compare 300+ lenders freely.

Day of Acceptance

Hard Pull — 5 to 10 Point Temporary Drop

One hard inquiry when you formally accept. Temporary and recovers within months.

Month 1

First Payment Reports to All 3 Bureaus

First on-time payment builds payment history. If you paid off cards — utilization drops immediately this month.

Months 3–6

Score Begins Meaningful Recovery and Growth

Consistent on-time payments compound. Hard pull impact has faded. Score typically above pre-loan level for consolidation borrowers.

Months 6–12

Net Positive Score Impact for Most Borrowers

Strong payment history established. Most bad credit borrowers see 30 to 80 point improvement from their pre-loan baseline.

After Payoff

Closed Account Stays on Report 10 Years

Paid-off loan remains as a positive closed account in good standing for 10 years — continuing to benefit your credit history.

FICO Score Factors — How Personal Loans Affect Each

Credit FactorScore WeightLoan Impact

Payment History35%✓ Major positive

Credit Utilization30%✓ Positive if consolidating

Credit History Length15%Neutral — new account

Credit Mix10%✓ Minor positive

New Credit Inquiries10%✗ Small temporary drop

Frequently Asked Questions

How does a personal loan affect your credit score?+

A personal loan affects your score in several ways. Checking your rate at Money247.com has zero impact (soft check). Accepting a loan causes a temporary 5 to 10 point hard pull drop. On-time monthly payments build payment history — the #1 factor at 35% of your score. Paying off credit cards with a consolidation loan reduces utilization immediately. Net result: most borrowers see meaningful score improvement within 6 to 12 months.

Does getting a personal loan hurt your credit?+

Short-term there is a small 5 to 10 point hard pull drop when you accept. Long-term on-time monthly payments improve your score significantly. Most borrowers see net positive credit impact from a personal loan within 6 to 12 months of consistent payments. The long-term gain far outweighs the short-term dip.

Will checking my rate affect my credit score?+

No. Checking your rate at Money247.com uses only a soft credit inquiry which does NOT affect your credit score. A hard pull only occurs when you formally accept a specific loan offer from a lender.

How long does a personal loan stay on your credit report?+

An open personal loan remains as an active account until paid off. After payoff it remains on your credit report as a closed account in good standing for 10 years — continuing to positively influence your credit history length and payment history.

How much can a personal loan improve my credit score?+

It varies by starting score and situation. Borrowers who use a personal loan to consolidate credit card debt often see the largest improvements — 20 to 60 points from utilization reduction alone within one billing cycle, plus ongoing payment history improvements. Bad credit borrowers making consistent payments for 12 months commonly see 30 to 80 point score improvements.

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How to Improve Your Credit Score Fast

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What Credit Score Do You Need?

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Debt Consolidation — Improve Score Fast

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Personal Loans for Bad Credit

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Disclaimer: Credit score impacts vary by individual credit profile. Figures cited are typical ranges based on industry research and may not reflect your specific outcome.

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