Will applying for a bank loan lower my credit score?

Question

I am in the process of raising my credit score, but would like to take out a relatively small bank loan (not apply for a credit card). Would this affect my score in anyway? 10 points for the most thought-out precise answer. :-)

Answer 1

It is true that every time you apply for or open any account it chips away at your credit score.

My Husband is a Mortgage Broker and sometimes he has to work with people for 2 or 3 years to get their credit corrected just so they can buy the house they want.

Pay perfectly every month on everything to improve your credit score. Call your creditors and Negotiate a decrease in interest. Pay the little ones off first. Then roll that payment money to the next smallest one and pay off. Work your way up.

ABSOLUTELY PAY ON TIME. NEVER NEVER NEVER HAVE LATE FEES OR CHARGES. This tells the credit community you are not trustworthy and they may up your interest rate.

NEVER overdraw your checking, this also ends up looking like bad credit.

Never take your finances casually. You will need good credit for your entire life.

Good Luck.

Answer 2

The person who is purchasing my house is having trouble finding financing. He states that he has had to use several different banks, and that each time he goes, they have to run his credit, lowering and lowering his credit score, and lessening the chance of him getting the loan. Determined to see if he was yanking my chain, I contacted my mortgage broker, who is highly qualified and experienced. He stated that running your credit score will lower your points, but not at all substantially. Maybe one or two points each time, which should certainly not make a difference what so ever. People who apply for credit cards to get "free gifts" and then cancel them when they get their gift, they suffer because they are constantly running their scores. But the average person will not be affected by running scores for loans and mortgages.

Answer 3

Bank loan for what? If it is for the purpose of a ready pocket money or for reinvestment. it may not necessarrily lower ur credit score. If loan is meant for unproductive activities like gambling, etc it may lower ur credit score.

Answer 4

Applying for credit and being accepted actually increases your credit rating - along as you make repayments on time.
Also someone who has never borrowed will have a very low credit rating.
Credit rating is worked out by how much and how you borrow not how much you dont!
Hope i made sense.

Answer 5

No, it is late payments, or no payments of bills that affect your credit score.

Answer 6

initially yes... anytime you take on more responsibility for repayment your credit score will decrease.... To increase it pay on time.....

Answer 7

you cool maybe by 2-5