Yes, as with any form of lending, if you pay back your monthly instalments in full and on time, this will have a positive effect on your credit score. Conversely, your credit score is adversely affected by payments that you miss. As long as you pay your  loan repayments every month on time and in full (or early if you wish), your credit score will show positively that you have fulfilled the agreement, and this may help you to access other forms of credit such as high street lenders and credit cards, in the future.

Please note, your credit score is an amalgamation of all your financial commitments, so if you have paid your loan, but not other debtors, your credit score is unlikely to show any improvement. We have a blog dedicated to Improving Your Credit Score, so click and read to find out how you can improve your credit rating.