Only if you are late paying it back. Use it to pay off bills and make on time payments to them. It will improve your credit.
No its not true..
It’s not the TYPE of loan.. its the TYPE of customer that determines your credit score..
Basically.. dont miss payments.. dont default most importantly.. AND don’t apply for too many loans especially at the one time.. every application gets recorded.. and if you have too many in any one year.. it will hurt your credit position..
Credit Union loans are fine..
Taking a personal loan from your credit union and paying it back on time will only strengthen your credit rating.
Any loan can hurt your credit rating because one of the factors your credit score is based on is debt to income ratio. If you debt goes up without your income going up, you have a higher debt to income ration which in turn will have a negative impact on your credit score.
That’s why right after someone buys a house, their score drops.
No a personal loan from the credit union will help your credit if you make your payments on time. If you take out a loan and are late on the payments then yes it will hurt you. The only time this is a real problem is when your credit to debt ratio is off. You owe more than you make. If it shows you are not making enough to pay the bills and buy food then they will not loan the money to you. It also is a factor if you are trying to make a large purchase like a car or a house. They will look at the credit debt ratio and make an analysis of it. 70/30 is a ratio after you are more than 70% in debt they back off on loans. Because you need at least 30% of your income to live on.
Any kind of loan, as long as you’re not late with your payments, should make your credit rating go up.
On a side note … I had a loan from my credit union about 3 years ago and it doesn’t even show up on my credit report.
February 9th, 2010 at 2:11 am
no actually it will increase your credit