Are personal loans good for credit?

Yes, personal loans are good for credit over the long run. Your credit score can take an initial hit when you apply for and receive a personal loan, as credit inquiries and new credit accounts can have a negative impact on your score. On the other hand, the single most important category of all major credit scoring formulas is your payment history, followed closely by the amounts you owe. So, as you make your personal loan payments on time and the principal balance declines, personal loans can be a positive catalyst to your credit score.