How Long Do Personal Loans Stay on Your Credit?

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Dori Zinn is a personal finance journalist with more than a decade helping people understand money. Her work has appeared in Wirecutter, CNET, Credit Karma, Huffington Post, and more.
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Published August 09, 2023
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In most cases, personal loans will stay on your credit report for around 10 years. But the type of inquiry can impact how long those marks actually remain on your credit report.

Pay attention to see how long new personal loans stay on your credit report and what these impacts mean for you when it comes to borrowing in the future.

Key Takeaways

  • Personal loans can stay on your credit report for a few years, depending on your how well you managed your loan payments.
  • When you complete a personal loan application, that triggers a hard credit check, which could remain on your report for a couple of years.
  • Missing payments and delinquent accounts can stay on your credit report for seven years, while bankruptcies and closed accounts paid in full could remain on your report for up to a decade.

How Do Personal Loans Affect Your Credit?

Personal loans can impact your credit in a few different ways, including:

  • When you complete a loan application
  • When you make (or miss) loan payments
  • When you finish paying off the loan

All of these can either help or hurt your credit score, depending on the circumstances.

Ways That Personal Loans Can Help Your Score

  • Paying on time: On-time payment history is the biggest factor in calculating your credit score. The more on-time payments you make, the more you can show future lenders that you’re responsible when borrowing money.
  • Diversifying credit: Part of your credit score calculation includes your credit mix, or the different types of credit accounts you use, like credit cards and loans. If you primarily use credit cards and don’t have much else in the way of credit, having a personal loan can add to your credit mix, which will give your score a boost.
  • Potentially reduce credit utilization: Your credit utilization is how much credit you’re using in relation to how much credit you have available. If you get a personal loan to consolidate and pay off your outstanding credit card debt, you’ll reduce your credit utilization, as long as you keep the credit card(s) in question open and then minimize any future spending. Keeping your credit utilization under 30% is ideal for keeping your score high.

Ways That Personal Loans Can Hurt Your Score

  • Hard credit checks: Before you even get a personal loan, you need to complete an application. Doing so triggers a hard credit check. This is necessary, since it’s what lenders use to verify your credit history. But these hard credit checks go on your credit report. After a hard credit check, your credit score will drop, though you can expect it to rebound after a few months of on-time payments.
  • Missing payments: If you miss a payment or fall behind, your score may immediately drop. The longer you either go without making that payment or continue to miss payments, the worse the damage to your credit score will be.
  • Paying off your loan: When you finish paying off your loan, your lender will close your account to that personal installment loan. This can lower your credit mix and the average age of your credit (another credit score factor). Closing an account can temporarily bring down your credit score—even though closing an account is normal when you’ve paid a loan in full—though it usually rebounds after a few months.

How Long Does Debt Stay on Your Credit Report?

How long personal loans stay on your credit report depends on a few different factors, like if you’re still paying off the debt and if you’re up to date on payments. For instance, if you have missed payments on your personal loan, those bad marks can stay on your credit report for up to seven years from the original delinquency date, or when your lender first reported those late payments.

If your accounts went into collections, it could stay on your credit report for up to seven years as well. Bankruptcies stay on your credit report for up to 10 years, depending on the type of bankruptcy you file for. Closed accounts that you’ve paid according to terms will also remain for up to a decade.

How Long Does It Take for a Personal Loan to Be Removed from a Credit Report?

A personal loan can stay on your credit report anywhere from a few years to up to a decade, depending on how you managed your debt. Missed payments may remain on your report for seven years, while bankruptcies and closed accounts that you’ve paid in full could stay on your report for a decade.

How Many Points Will My Credit Score Drop for a Personal Loan?

Credit score fluctuation happens often, and yours can drop or spike at different times. For instance, when you complete an application, your score can drop from the hard credit check. But after a few months of on-time payments, your score can rebound and start improving again.

How Do I Remove a Personal Loan from My Credit Report?

If personal loan information on your credit report is true and accurate, it’s much harder to remove than false information or fraud.

For instance, if you fell behind on personal loan payments, your loan might have gone to a collection agency in an attempt to collect the outstanding debt. Once it’s delinquent, the bad mark can stay on your credit report for seven years—and it won’t come off before then.

If you would like to get an incorrect derogatory mark removed from your credit report, you can file a dispute with the credit bureaus. You’ll need to do so with each bureau, as there’s no single form for all three.

The Bottom Line

Personal loans can be a great way for many folks to pay for a large expense or consolidate debt. But with personal loans comes some extra baggage on your credit report.

Depending on the circumstances, a personal loan can stay on your credit report long after you’ve finished paying it off. And if you never paid off your loan, that will also impact your credit score for seven years.

Article Sources
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  1. Experian. “How Does a Personal Loan Affect Your Credit Score?”

  2. myFICO. “What’s in My FICO® Scores?”

  3. myFICO. “What Does Credit Mix Mean?”

  4. Consumer Financial Protection Bureau. “Credit Score Myths That Might Be Holding You Back from Improving Your Credit.”

  5. Experian. “What Are Inquiries on Your Credit Report?”

  6. Experian. “What Is a Delinquency on a Credit Report?”

  7. Experian. “Why Did My Credit Score Drop When I Paid Off a Loan?”

  8. Equifax. “How Long Does Information Stay on My Equifax Credit Report?”

  9. Consumer Financial Protection Bureau. “How Long Does Negative Information Remain on My Credit Report?”

  10. Consumer Financial Protection Bureau. “How Do I Dispute an Error on My Credit Report?”

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