Can Applying for a Personal Loan Impact Your Credit Score?

Indeed, it can. The act of applying for a personal loan might lead to a temporary decrease in your credit score. However, this drop is typically short-lived. As timely payments play a crucial role in determining your credit score, consistently making payments on time can gradually enhance your credit score.

Moreover, your credit score considers various factors including credit utilization ratio, length of credit history, types of credit, and recent credit inquiries.