 TITLE: How Does a Personal Loan Affect Your Credit Score? CONTENT: Depending on how you use them, personal loans can help to improve your credit score in several ways.\n*   **Contributing to a better credit mix**: Having a variety of different types of credit helps to boost your credit score. A personal loan is an installment loan (meaning you pay it off in regular monthly installments). If most of your credit is revolving credit, such as credit cards, a personal loan can enhance your credit mix.\n*   **Helping you build a payment history**: Making your personal loan payments on time helps to establish a positive payment history, which can increase your credit score. (The key is to be sure you can make the loan payments in full and on time every month.)\n*   **Reducing your credit utilization ratio**: Because it's an installment loan, a personal loan doesn't factor into your credit utilization ratio, which measures how much of your available revolving credit you're using. Using a personal loan to pay off revolving credit, such as credit card debt, can help you improve your credit scores by replacing revolving debt (which factors into your credit utilization ratio) with an installment loan (which doesn't). END