How can I use personal loans to improve my credit mix?

Personal loans can help refine your credit mix which is one of the components credit bureaus use to calculate your credit score. Credit mix means the variety of credit types you manage—like credit cards, home loans, auto loans, and personal loans. If you only have credit cards then adding a personal loan shows you can handle both revolving and instalment credit. This can boost your score over time. When you take a personal loan and pay EMIs on time, it adds positive repayment history to your credit report. Lenders see you as more responsible when you manage different types of credit well. Don’t take too many loans at once, though. Too many new accounts or credit enquiries can hurt your score. Use a personal loan to pay off high-interest debts or consolidate multiple loans. This can also improve your credit utilisation ratio. Make sure you borrow only what you need and can repay comfortably. Consistent, on-time payments are key. Over time, a healthy credit mix can help you qualify for better loan offers along with lower interest rates.

Regularly checking your credit report lets you monitor how your credit mix is improving and spot any errors early. This proactive approach helps you maintain a strong credit profile, making it easier to access better financial products and terms in the future. Responsible borrowing and timely repayments are always the best strategy.