Yes, a Payoff personal loan does affect your credit score, both when you submit the application and when you are paying the loan off. Checking your rate on Payoff will not hurt your credit, but they run a hard inquiry before finalizing your loan application, which might decrease your credit score.
How a Payoff Personal Loan Affects Your Credit Score
Hard pull: When you apply for a Payoff personal loan, Payoff will do a hard inquiry into your credit history, which will temporarily drop your credit score by about 5-10 points in most cases.
Increased debt level: Taking out a Payoff personal loan will naturally increase the amount of debt that you have. Since your debt level is one of the components of your credit score, you can expect that to have a negative impact initially.
Account diversity: One positive way that getting a Payoff personal loan can impact your score right away is by adding more diversity to the types of accounts you have open. Your "credit mix" is one of the components of your credit score, and the more types of accounts you have, the better - as long as you handle them responsibly.
Payments: The biggest factor in how a Payoff personal loan affects your credit score is whether you pay on time. If you make on-time payments, your score should steadily increase as a result. If you pay late or fail to make payments altogether, you can expect your credit score to drop.
The bottom line is that while a Payoff personal loan does affect your credit score, most of the way that your score changes depends on how responsible you are with the loan. If you'd like to estimate how certain actions might affect your credit score, you can use WalletHub's free credit score simulator.
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