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credhelp

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why did my credit score drop when i got a credit builder loan specifically to build it?
hello i am new to credit sorry for possible dumb question. but i opened a credit builder loan specifically to increase credit for some reason dropped me 40 points on both scores pls tell me why and if getting a credit builder loan is something i shouldnt do thanks.

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I don't know what a 'credit builder loan' is, but I'm going to make some assumptions about your credit score dropping as a result of opening one. The loan must have involved a hard inquiry on your credit report, and that's one of the factors used in calculating your score. Also, you now have a new account on your report, and that's another factor.

The good news is that this loan company [apparently] does report to the credit bureaus--so you're going to reap the rewards, not just the negative stuff above! Once you're paying your loan on time and everything, your score will start going up; on-time payments are HUGE when it comes to how much they affect your score.

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Thank you linuxusersi, it was a personal loan i was told was a credit builder loan to specifically help build/increase credit. I may have been lied to and suckered into getting it with horrible pay back amount. I hope i will get some kind of benifites ina few months atleast come back up to where it was. so sorry for late reply. Thank you again.

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