Personal loans aren’t bad for your credit score, especially from a long-term perspective. Your credit score may take an initial hit when you open a personal loan. Newly opened credit accounts, as well as hard credit inquiries, are both potentially negative factors in your credit score that can come from opening a personal loan. However, as you make your loan payments on time and begin to pay down your balance, personal loans can have a positive impact on your credit score that is likely to outweigh any initial negative effects.