 TITLE: If I Get Approved for a Personal Loan, Do I Need to Accept It? CONTENT: How a Personal Loan Can Affect Your Credit\n------------------------------------------\nAs mentioned before, applying for a personal loan can result in a hard inquiry on your credit report, which can temporarily drop your credit score by a few points. Also, taking on the new monthly payment will increase your debt-to-income ratio, which can affect your chances of getting approved for credit in the future.\nAnd, of course, missing payments or defaulting on a personal loan can have a significant negative impact on your credit score.\nThere are, however, some potentially positive effects a personal loan can have on your credit. For starters, taking out a loan and making payments on time and in full each month can establish a positive payment history, which is the most significant factor in your credit score.\nAlso, a personal loan can improve your credit mix—the different types of credit you have—and reduce your credit utilization rate if you're using it to pay down credit card debt.\nAs you consider whether a personal loan is right for you, think about how it can impact your credit for better and for worse. END