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The data used in this study is IFLS data with fixed effect estimation method. The study shows that informal credit has a more negative impact on household welfare compared to the use of formal credit. And, the use of semi-formal credit has a more negative impact on household welfare compared to the use of formal credit. It can be due to higher interest rates in the use of informal credit compared to semi-formal and formal credit. This study also shows that credit used for productive purposes has a more positive impact than credit used for consumptive purposes. The greater the amount of credit used, the more positive the impact on household welfare is compared to the use of fewer loans. The results of this study can be the basis for the government to be concerned about the policy of credit interest rates to the public.