 TITLE: What’s a Good Personal Loan Interest Rate? CONTENT: How Personal Loans May Affect Your Credit Scores\n------------------------------------------------\nAlthough it's important to shop around for the lowest interest rate, submitting applications to multiple lenders will lead to several hard inquiries on your credit report. That can have a small negative effect on your credit score before they drop off after two years.\nOne way to avoid multiple hard inquiries on your credit report is to comparison shop during a short time period to minimize the impact. Most credit scoring models will count several hard inquiries for the same type of credit product as a single event if they occur in a window of a couple weeks.\nIn addition to prequalification, some lenders may also offer you preapproval, which the lender initiates to determine whether you are qualified for a loan. Preapprovals lead to soft inquiries only.\nPersonal loans can help improve your credit score if you develop a history of on-time payments; they may also boost your score if they add to the types of credit in your file. But if you pay late or miss payments altogether, your score will suffer—which can limit your ability to access other forms of credit at favorable terms. END