Grace Enfield, Content Writer
@grace_enfield
A credit-builder loan will raise your credit score up to 60 points in the first few months, according to Self and MoneyLion, two notable credit-builder loan providers. Research from the Consumer Financial Protection Bureau also found that a credit-builder loan raises your score the most if you don’t have existing debt.
You can use WalletHub’s free credit score simulator to estimate how your credit score in particular will change. The exact increase in points varies depending on factors like where your score is to begin with, the length of the loan and if you pay on time. New credit users may have a credit score of 630 to 650 by the end of the loan period, though.
If you think a credit-builder loan is right for you, check out the top ranked credit-builder loan options on WalletHub.
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There are several ways to raise your credit score in 30 days. Reducing your credit utilization is one of the fastest ways to raise your credit score, and you can do it by paying down debt, spending less, paying your bill more often or asking for a higher spending limit. Disputing negative information on your credit report can help quickly, too.
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Personal loans affect your credit score in the short-term and in the long-term. In the short-term, a personal loan may damage your score because it causes a hard credit inquiry and increases your debt load. But in the long-term, a personal loan can either help or hurt your credit, depending largely on whether or not you pay the bills on time. Ultimately, it’s up to you how much impact the personal loan will have.
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