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The 411 on credit-builder loans

Posted on Monday, June 17th, 2019

If you have poor or no credit, it’s difficult to get loans or to build your credit profile. One way to tackle these problems is to use a credit-builder loan. We’ve provided the 411 on credit-builder loans here so you can understand how they work and if one could be right for you.

Credit-builder loans have short terms and involve borrowing an amount of money that’s held in a bank account while you make payments on it. They are also known as Starting Over Loans or Fresh Start Loans. You may not have heard of them because they are usually available through smaller organizations such as community banks and credit unions – and not heavily advertised. Though this loan does not require credit history or good credit to qualify, you do need to show that you can make the necessary payments.

If you’d like to pursue a credit-builder loan, you’ll need to do some research to find one with a payment that you can easily afford. After you’ve applied for it, and, if approved, the amount borrowed is placed in an account you can’t touch until you’ve paid it all off. This makes the loan less risky for the lender.

To get the most out of this loan, you should:

  • Make all payments on time so that positive information is reported to Experian, Equifax and TransUnion.
  • Keep an eye on your credit score and report (visit the resources below to check your credit report for free).

Once you’ve paid the loan in full, you will receive the total amount and whatever interest has accrued on the account. If you didn’t miss payments, your hard work will show in an improved credit score.

This way of building credit takes patience and discipline. But if you stick to your payment schedule, a credit-builder loan can be a great asset in your credit-building toolbox.

To read more on this subject, go to:

  • What Is a Credit-Builder Loan?
  • How credit unions help raise credit scores
  • Credit Builders Alliance Offers Path to Financial Mainstream
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This offer is for a business, mortgage, student, or unsecured personal loan referred or offered by We Lend USA, LLC®. All business, mortgage, and student loan requests submitted through We Lend USA, LLC® are funded by a third party.

We Lend USA, LLC®  is a lender and also provides loan referral services. Loans are not available in all states. In Alabama, Arizona, California, Florida, Idaho, Iowa, Louisiana, Maryland, Michigan, Missouri, Montana, New Mexico, Ohio, Oklahoma, Pennsylvania, Texas and Wisconsin personal loans are provided by We Lend USA, LLC®, a licensed lender. In Alaska, Arkansas, Kentucky, Massachusetts, Nebraska, New York and North Carolina personal loans are issued by We Lend USA, LLC® compliant with state permitted usury laws.  In the states of Indiana, South Dakota, and Washington D.C. your personal loan will be fulfilled via our preferred network of third-party lenders. Your loan agreement will clearly identify the lender. For detailed information concerning We Lend USA’s licensing information please visit www.welendusa.com/rates-terms-and-licenses.

We Lend USA, LLC® has no control over participating third-party lender credit worthiness eligibility criteria. APR/Interest rates will vary depending on individual lender terms. Generally, all individuals applying for credit must be a U.S. citizen or permanent resident and at least 18 years old. Valid bank account and Social Security Number/FEIN are required. All loan applications are subject to credit review and approval.

You authorize us to make inquiries and obtain and confirm information about you as we deem appropriate for the purpose of evaluating your eligibility for this extension of credit, including obtaining credit reports, verifying your income, and contacting your employer. You also authorize us to provide identification information about you, and our credit experience information with you to others in accordance with applicable law. Duplicate offers received as a result of multiple mailing to the same person are void, as are multiple acceptances of the same offer. This offer is subject to the expiration date listed on your offer letter.

*Annual Percentage Rate. Not all borrowers will qualify for the same rate when a rate is listed “as low as”. Qualifying for rates listed “as low as” are based on the borrower’s credit worthiness, which includes factors such as debt ratio and credit history. Interest rates will vary and are based on lender terms. Ranges from 7.99%-36%. All loans may be subject to origination fees ranging from 1% – 5%, of the loan amount, if permitted under applicable state law. All loans for We Lend USA, LCC®, are done through Simple Path Financials licenses. For detailed information concerning We Lend USA, LLC® licensing information please visit www.welendusa.com/rates-terms-and-licenses.

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