4 Thoughts on If you take a bank loan and you pay it off on time, does it increase your credit score?
  1. Reply
    25531
    July 25, 2011 at 5:05 am

    Yes. If you take out a loan and make regular payments on time it will increase your credit score. Be careful, because if you miss a payment they can increase Interest rates and decrease your credit score.

    As far as minimum loans, I have never heard of anything under $ 1,000. The best thing to do is visit a couple of banks and see what loans will fit you the best. Good Luck

  2. Reply
    ghutch1029
    July 25, 2011 at 5:27 am

    It does not neccessarily “increase” ypur credit score but it does to continue to keep your credit score good. The “median” credit score used by Equifax and others is based on your overall credit history and has to do with a lot of different factors. Say for instance you start out with a credit score of 650. You take out a new loan pay it on time for the duration of the loan but along the way you have “excessive” inquiries into your credit profile for new credit then your score could actually drop. The key with credit reports is balance..paying all your bills on time over a period of time and keeping applications for new credit to a minimum. Under this model your score would grow gradually over time into an “excellent or higher” rating.

    TIP–Be very careful about paying your bills on time..Once you get a negative item on your report it can take a long time to get it removed and regain a good score.

    GH

  3. Reply
    trudred
    July 25, 2011 at 5:43 am

    There are so many factors that go into increasing your credit score, time being the main one. While paying your bills on time consistently may not necessarily increase your score, it will prevent your score from decreasing. However there are many other things, your debt to income ratio, the length of time your accounts have been opened an paid in full, the number of time your report has been pulled, the type of inquires etc.

    Most financial institutions have a minimum loan amount. Though this varies, the typical amount in $ 1,000 for personal loans and $ 5,000 for vehicle loans.

    Regards

  4. Reply
    frod1970
    July 25, 2011 at 6:29 am

    Yes. It does increase your credit score. As for the bank minimum. Depends on the criteria of the bank credit procedures

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