Your credit score is important in so many ways. You’ll obtain loans at lower interest rates; find it easier to rent an apartment, a job, and utility service: and your car insurance premiums might even come down.
Okay, so most people know that. Most people know the importance of avoiding late payments. Most people know to owe less than their credit allows (if not, see my other article on “The Right Way to Use Secured Credit Cards After Bankruptcy”). But how do you get your credit score to be in a good range if you find it difficult to get credit at all?
Secured Credit Cards
Secured credit cards are a good solution. You put money in the bank and the bank gives you a credit card equal to the amount it’s holding for you. This works extremely well, but you need to have money to put in the bank. Secured or unsecured credit cards are called “revolving credit,” and they work great!
Installment Loans
“Installment credit” means a loan for a specific period of time. An example of this is a car loan. They also work great! In fact, it’s even better if you have both!!
Until now, it has been hard to qualify for an installment loan if your credit isn’t already at least decent.
Credit Builder Loans and “Self-Lender”
A “credit builder” loan is starting to become more popular. They are offered by some banks and credit unions. However, each lender’s requirements are different. A fairly new type of “credit builder” loan that’s gotten good reviews, due to its simplicity and easy availability online is for “Self Lender.”
Once you’re approved by Self Lender, it deposits money in a certificate of deposit with the firm’s partner, Austin Capital Bank. You’ll make regular payments for a year, then get access to the money.
You can choose as low an amount as $550 (the amount doesn’t matter for your credit score, so it’s okay to keep it low). You’ll make the monthly payments, and at the end of the loan, the $550 is yours.
A Very Small Price To Pay
You’ll spend about $40 in fees, but that’s a small price to pay to start getting a good credit score. Plus, if you leave your $550 in there, it could be the start of a great emergency fund! If you need to close the account before it’s paid off, you’ll still get your $550, minus any money you still owe.
Peter Blinn
For over 35 years, listening to clients and putting them at ease, while finding solutions and helping achieve future goals, in Marion County, Lake County. Citrus County, Sumter County, and The Villages.
