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Keeping it open for the life of the loan may actually be better for your.

Does paying off a personal loan build credit. If you monitor your credit regularly and have made a large payment to a credit card account you may have seen your credit score take a nice little hop after the payment posted. A personal loan can be a good tool for building credit. Paying off your personal loan is also not like paying off your credit card at least as far as your credit is concerned.

As you make payments on a personal loan you may see your credit score begin to improve. Having multiple lines of credit that are close to their limits increases your credit utilization ratio. Paying an installment loan off early won t boost your credit score.

A better score can make you eligible for other types of credit.

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