Does getting a personal loan help your credit score?
When considering your funding options, you may be wondering if getting a personal loan helps your credit score. We’ve got good news: yes, it can!
Personal loans are a great way to get the money you need to cover everything from debt consolidation to emergency expenses, medical bills to auto repairs. But did you know they’re also a great way to start building or improving your credit?
Here are a few of the ways a personal loan can help you:
It’s a great way to establish a healthy payment history.
Because World reports to three credit bureaus, a personal loan can boost your credit score as you make on-time payments over time. This is a critical part of improving your credit score because it demonstrates that you know how to manage your money and debt and are committed to responsible spending.
It decreases your credit card utilization.
One of the factors taken into consideration when calculating your credit score is your credit card utilization ratio – the amount of credit available to you compared to the amount of credit you’re currently using. By using a personal loan to pay down your high-interest credit cards, you reduce the ratio, which has a positive impact on your overall score.
It adds a new kind of credit to your report.
You’ve probably heard that variety is the spice of life, but did you know it’s also good for your credit score? Your “credit mix” (the different kinds of credit you utilize) accounts for 10% of your overall credit score, a personal loan adds a valuable new type of credit to your mix.
It increases the longevity of your credit history.
When it comes to your credit score, time matters. The longer you have an account in good standing, the more positive the impact on your credit score. By opening a personal loan and making on-time payments over the life of the loan, you’ll begin to establish a credit longevity that boosts your credit score.
For the past 50 years, World Finance has been a proud partner in helping people realize their financial goals and get back to the good. We treat our customers like our friends and neighbors – because they are! With over 1,200 branches in 16 states, you’ll never be treated like a number or a credit score. Our team members work with you to understand your unique needs and goals, so they can help find the just-right loan solution for you.
See what our customers are saying:
This place was and still has been a life saver for me. I’m excited to see my score increase and it has made a significant difference in my life since December 2020. I recommend World Finance to anyone!!!!
– Chelle D.
Ready to apply?
Our pre-qualification process is easier than ever and can be completed entirely online. (Bonus: it won’t impact your credit score, even if you’re not approved!) We’ll take your whole financial picture into account when considering your application, even if you have bad credit or no credit. What are you waiting for?