Grace Enfield, Content Writer
Yes, a personal loan through Upstart does affect your credit score, both when you apply and during the entire time that you are paying the loan off. Initially, a personal loan through Upstart will affect your credit score negatively, but the long-term impact can be very positive, if you repay the loan on schedule.
How a Personal Loan Through Upstart Affects Your Credit Score
Hard pull: There will be a hard inquiry into your credit history to finalize your loan approval, which will temporarily drop your credit score by about 5-10 points, in most cases.
Increased debt level: Taking out a personal loan through Upstart 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 personal loan through Upstart 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 personal loan through Upstart 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 personal loan through Upstart 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. Additionally, you can see your approval odds and estimate your potential rates without damaging your credit score on Upstart’s website.
When you check your rate, Upstart will check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, Upstart will do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information will be reported to the credit bureaus.
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