For a finite graph G and a natural number n we study the homology of the configuration space Conf_n(G) of n particles in G. A graph is called a “tree with loops” if it can be constructed from a tree by taking the iterated wedge sum with copies of S^1 for different choices of base points. We prove that if G is a tree with loops then the homology of Conf_n(G) is torsion-free and generated by products of 1-dimensional classes. For general graphs G we give a generating set for the first homology group H_1(Conf_n(G)). Using these results and the techniques used in their proofs we then prove representation stability for specific sequences of configuration spaces of graphs given by either enlarging the graph or increasing the number of particles.F...