Taking loans is one way to improve your credit score. In order for your debts to have this positive impact, you must assure that the loans are high value for your report. Some loans can have the opposite effect and actually damage your score. Consider these tips to find loans that will build your score quickly without costing too much money.

#1 Installment Loans

Installment loans have the largest positive impact on your credit when they are repaid. These loans get their names from their structure. An installment loan is paid off over a series of installments each year until maturity. Installment loans include mortgages, car loans and some electronics loans. If you have never taken an installment loan, your credit may be low despite your good record of repayment. Therefore, as long as the interest rate is reasonable, it is wise to take an installment loan for an asset even if you have the money to purchase the asset out right.

#2 Unsecured Personal Loans

Unsecured personal loans are a quick but costly way to build your credit. With an unsecured personal loan, you are not placing any collateral on the line. Instead, a lender agrees to extend you the money based solely on your contract to repay the debt. Since the lender is taking such a high risk with this loan structure, the lender will charge high interest rates on the debt. You will often see unsecured interest rates listed at double the rate for a secured loan. However, credit agencies do prioritize these loans as "better" for your credit. Since you are not placing any collateral down, you keep all your assets on one side of the balance sheet. This means your asset-to-debt ratio can be more favorable than if you took the same loan with collateral.

#3 Credit Lines

Revolving credit lines can boost your credit when used wisely. The main factor here is to ensure that you are using only a small portion of your available credit on any line you open. For example, if you open a $5,000 credit card but immediately run up $4,000 worth of charges, you will see your score drop. If, however, you charge regular payments to the card but carry only a $50 balance, you are within the recommended 10 percent ratio. This will provide you with a boost to your score, and your regular payments will help raise your score even higher.

#4 Consolidation and Refinancing Loans

Be wary of consolidating, refinancing or paying off loans to boost your score. When you pay off loans on time, your score will go up. Yet whenever you pay off loans off schedule, which is what happens with refinancing or consolidating, the lender may actually knock your credit score. This occurs because the lender may lose profits when you repay a loan early. To discourage this behavior, lenders report consolidated or refinanced loans as closed but in a manner unsatisfactory to the lender. This can actually drop your score even though you paid off a large loan sum.

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