This is called a credit enquiry. If for any reason your loan application is rejected, the credit enquiry is likely to impact your credit score, as too many credit enquiries tend to have a negative impact on your credit score. However, if you loan is approved, and you demonstrate that you can make timely repayments on the loan, this has a positive impact on your credit score, as you build good credit history. Also remember, that once you get a loan, it impacts the amount of incremental credit you can obtain for a given level of income. In other words, just because you have a good credit score and are considered 'loan eligible' just now, it does not mean that you can get any amount of credit - it is dependent upon your monthly income and your current monthly obligations. In summary, obtaining a personal loan and maintaining a good repayment track record is essential to building a good credit score. It might be a good idea to replace high interest credit card debt with a lower interest personal loan. The EMI on the personal loan also forces a minimum repayment discipline. However, you need to ensure that once you have repaid the old credit card, you do not rebuild the credit card debt once again. This is likely to cause a much larger problem in the future, if you are not careful.