Can a Small loan make your score worse??

Submitted by suburban86 on Sat, 03/27/2010 - 12:11

I have no credit debt except for my mortgage and $1,000 left on my car loan. I make 85,000 a year. My credit score is only 600 due to the fact that I got cancer a few years ago. I recently got approved for a $1,500 personal loan. I only did this to try and improve my credit score. When I used a credit simulator on another site it actually dropped it a few points??!! I thought this would eventually improve my credit, not hurt it. How am I going to improve my credit if I never get loans?

Hi Suburban,

Your credit report was pulled by the lender to whom you had applied for the loan. This has resulted in the lowering of the points. This is called hard pull. To improve credit score you need to maintain your payments. Check your credit report. If there are any wrong listings try to dispute those with the credit bureaus.

As for the loan and mortgage try to pay more than the minimum. This will help in improving the credit score. Fir more details on how to improve credit score, you can visit… .

Hope this helps.



Sat, 03/27/2010 - 12:28 Permalink

Thank you Aaron. I will definitely check out the link. I am on a mission to improve my credit score. I really want to buy another home in 1.5 years and get a decent interest rate.

Sat, 03/27/2010 - 12:32 Permalink
Mark Johnson (not verified)

Hello Suburban,

Do not worry, tension is not a solution. I think you should check your credit score if your credit history is bad so please improve your credit score it will help you for take loan if your credit report is excellent so you can get loans on low rate interest. But do not worry you can take Loans For Bad Credit it is good for you.
To improve your credit i have some suggestion for you.
• Pay your bills on time.

• The longer you pay your bills on time, the better your credit score.

It will stay on your report for seven years.
I hope you can take loans

Wed, 04/07/2010 - 06:18 Permalink
Anonymous (not verified)

Thank you for the advice Mark. I really appreciate it.

Wed, 04/07/2010 - 16:06 Permalink

I have recently learned that keeping your available credit at a 30% gives you a better score also, paying more than the monthly payment raised my husbands score 6 points in one month, this is the first time that I have actually seen this happen.

Wed, 04/07/2010 - 16:32 Permalink
tracy (not verified)

No i do not think so that..Even now a days small loans are so popular
because they are available online.

Mon, 08/23/2010 - 11:58 Permalink
Moco (not verified)

It initially may lower it at first due to the pull...but timely payments you will see it go back up. The best way to increase your score is to open a secured credit card. Revolving credit will help. Get the loan paid down quickly and open a secured credit card...keep the balance 30% or less and make timely payments. You will see an increase in your score.

Tue, 12/28/2010 - 16:56 Permalink

Small business or personal loans like hard money loans are going to affect your credit score a lot. If are borrowing money to invest in small business then there is is no doubt your credit score will improve after some difficulties. You why.. as you invested this money on business and sooner or later you will start gaining some profit and it became easy for you to pay back your debts with ease...

Tue, 01/11/2011 - 11:36 Permalink