A loan will lower your credit score in the short term, but making on-time payments will restore it and help you improve your credit.

Nobody likes to borrow money. We don’t want to be indebted. But there are various needs in our life that require us to seek a loan. 

Buying a home, getting your dream car, pursuing that much-needed management course, going on that long-awaited vacation, or having your dream wedding; most of these dreams require some extra funding and we have to go for a loan. 

You need to have a good credit score secure the best loan and then you have to repay the loan correctly to maintain a healthy credit score. 

A loan can affect your credit score negatively if you do any of the following things: 

  • Default on loan payments
  • Delay or miss a loan payment
  • Take multiple loans at the same time
  • Maxing out your credit cards

Be careful to avoid the actions mentioned above, if you want to maintain a healthy credit score. If you have one or two instalment loans and you repay them promptly, it will give a big boost to your credit score. 


A credit score is very important to get any kind of credit. So once you get a loan, you have to make prompt repayments and avoid defaulting on your loans so that your credit score continues to remain healthy.