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Best Personal Loans for Rebuilding Credit

July 2024

A personal loan can help people with poor credit or no credit history build credit. These loans report to credit bureaus and don't require good credit to qualify. Find out which lenders provide the best personal loans for rebuilding credit.
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Your credit is a valuable financial tool you can leverage to obtain great deals on credit cards and loans. However, it determines much more than the cards and interest rates you can get. For example, landlords take credit scores into account when determining which applicants they will approve, and insurance companies consider them when calculating your auto and home insurance premiums.
Making on-time payments on a personal loan can help you improve your credit because your payment history is the single most important factor in your credit report. However, if you have poor credit or no credit, it can be a challenge to get accepted for a loan. The good news is there are lenders who will consider borrowers with less than perfect credit.
Here is our list of the top personal loans for rebuilding credit.
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SuperMoney's list of the best credit rebuilding loans is based on the qualitative recommendations of our community members and the quantitative recommendations of our ranking algorithms. We filtered for lenders that consider borrowers with less-than-great credit and who report to credit bureaus.
However, these are not the only factors you should consider when comparing personal loans for rebuilding your credit. Other features to consider are flexible loan terms, low-interest rates, and competitive fees.

Common Questions About Personal Loans for Rebuilding Credit

How can a personal loan build credit and help your score

Your payment history is the most important factor when calculating your credit score. If you make regular and timely payments on a personal loan, it can help you establish a good payment history, which will improve your credit score. A personal loan can also help you consolidate other debts into one single payment. This can make it easier to manage your debt and reduces the chance you will miss a payment. Consolidating credit card debt into a personal loan can also reduce your credit utilization rate, which is another factor credit bureaus consider. Applying for a new personal loan may also improve your credit mix, which can also boost your score.

Can a personal loan cover an emergency and help my credit at the same time?

Yes, it can. A personal loan can be a quick source of cash to pay for an emergency and it also can help improve your credit it you don't miss a payment. The key is finding a lender that will accept your loan application and reports to credit bureaus.

Secured vs. unsecured personal loans, which are best for building credit?

Both types of personal loans can help improve your credit when you pay-in-full and on time. However, it is easier to qualify for a secured personal loan, particularly when your credit is not great. Also, secured personal loans will typically have lower interest rates and fees. The catch is you need to have a valuable asset, such as cash in a savings account, a car, or a home, to qualify for a secured loan. And if you default on the loan you risk losing your security.

How long does it take before a personal loan has a positive effect on a credit score?

A personal loan will start to improve your credit history as soon as you make on-time payments. However, it's not a quick fix. It can take six months to a year before your credit score shows significant improvement.

How can you be sure the lender reports your payments to the major credit bureaus?

Rebuilding your credit with a personal loan will only work if the lender reports your steady, regular payments to the main credit bureaus.
Lenders should specify their reporting policy on their website. If you can't find the information there, call them to find out. With an existing loan, you can check your credit report to see if your payments show up. SuperMoney's comparison tools allows you to filter for lenders who report to credit bureaus. The lenders in the list above all claim to report to credit bureaus.

What is a credit builder loan?

Credit builder loans and regular personal loans to rebuild credit are both installment loans, but there are some significant differences. A traditional personal loan gives you the full amount after the loan approval. You then have to make monthly payments until you repay the debt. With a credit builder loan, it works the other way around. You first have to make monthly deposits into a savings account, which the lender reports as payments to credit bureaus. Once you have made all the payments, you can access your money. A credit builder loan is an excellent way to improve your credit if you can't qualify for an unsecured loan and don't have the cash or assets for a secured personal loan.

What are the pros and cons of rebuilding credit with a personal loan?


  • No surprises. Personal loans have fixed rates and monthly payments. You know how much each payment will be and when the loan will be repaid.
  • Fast process. In some cases, you can access the funds within a day.
  • Easy to apply. Apply within a few minutes with an online form.


  • Personal loans can have high-interest rates if you have no credit or poor credit.
  • Miss a payment, and it will hurt your credit score instead of helping it.
  • If you can't pay and default on the loan, it could end in collections, which will further damage your credit score.

What alternatives are there to personal loans to build credit

Personal loans can be a great tool for building credit, but it's not the only option. Here are three alternatives to consider:
  • Apply for a secured credit card. They require a security deposit, but it's an excellent option for people with bad credit who don't qualify for a regular credit card.
  • Get a credit-builder loan. You only get access to the funds when your loan term is completed, but it's safer than a traditional loan.
  • Apply for a car loan. If you're in the market for a new car, it can help build a positive payment history and diversify your credit mix just like a personal loan.

Where can I get a loan to build my credit?

You can get personal loans for rebuilding credit from a wide variety of banks, credit unions, and other financial institutions. The lenders in the list above are an excellent place to start. Rebuilding damaged credit can look like a massive financial hurdle. However, a personal loan for rebuilding credit can help you get started.

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