Personal loans are versatile financial tools that can impact credit scores positively if managed responsibly. They can consolidate high-interest credit card debt, offer fixed repayment terms, and aid in building credit history, particularly through credit-builder loans. The average American with a personal loan has a balance of $11,500. To boost credit scores, one should pay off high-interest debts, use credit-builder loans, maintain a mix of credit, and make timely repayments. Responsible borrowing is crucial for using personal loans effectively to improve credit scores.

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