 TITLE: Will Paying Off a Personal Loan Early Help My Credit? CONTENT: Does Getting a Personal Loan Help Your Credit?\n----------------------------------------------\nGetting a personal loan and making all your payments on time can boost your credit in a number of ways. A personal loan appears on your credit report as an installment loan—a type of loan that has a specific loan amount and a set repayment schedule. Installment loans are different from the revolving debt you may carry on credit cards. Adding an installment loan to your \"credit mix\" can improve your credit score because it shows that you can manage different types of debt.\nMaking monthly loan payments on time adds to your successful payment history—and that's significant. Your payment history accounts for 35% of your FICO credit score and is, in fact, the biggest factor in determining your score.\nBe aware that a new personal loan can put a momentary drag on your credit score. Lenders typically run what's called a hard inquiry on your credit when you apply for a loan. These can lower your score by a few points, though the effects are temporary. A new loan also reduces your average age of accounts. This problem starts to resolve itself as you pay the loan off over time, building your history as you go. Initially, however, new accounts make your credit look less \"mature.\" END