Grace Enfield, Content Writer
A loan from Prosper will temporarily hurt your credit score because the company will perform a hard pull of your credit history when you officially apply, which will drop your score by about 5 to 10 points. The new loan will also add to your overall debt load, which hurts your credit score.
However, you can avoid risking credit score damage for no reason by pre-qualifying first. Prosper only uses a soft pull of your credit, which does not affect your credit score, to pre-qualify potential borrowers, and your odds of approval are very high if you get pre-qualified.
The negative impact on your credit from applying for and opening a new loan does not have to last long, either. A loan from Prosper will help your credit score in the long run if you pay the monthly bills on time, as doing so adds positive information to your credit reports. This should offset any initial decrease in your credit score after you take out the loan.
To predict how your credit score will be affected, check out the free credit score simulator on WalletHub.
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