topic Re: Credit Builder Loans in Rebuilding Your Credit

Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 03:48:23 GMT

Has anyone every used a Credit Builder Loan to boost their score? Rate on this one here in Texas where I live is 8.25%. I already have a Cap One secured card and this loan seems like a great way to build my credit without having to come up with the funds myself.

They put the money you are approved for into an account and use it as collateral while you pay off the loan. When the loan is paid off, you get the cash.

Seems an excellent idea to me at the cost of some interest.

What do you guys out there think?

https://www.r1cu.org/loans/personal/

Another one in New Hampshire.

http://www.stmarysbank.com/personal/consumer-loans/credit_builder.asp

Re: Credit Builder Loans

credit-hunter — Thu, 06 Nov 2014 04:29:44 GMT

Most credit unions offer them check around you might be able to get a better rate.

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 05:05:17 GMT

Idealy you have to have mixed credit in your files, before you get a personal rebuider loan do you have any other loan or installment loan like auto loan? Keep in mind that although its a good way to build credit with the rebuilder loan, but once you paid it off it will lower your score slightly. The same way you paid off your auto loan or other installment loan.

Now If you never have any installment loan, I suggest you go ahead and take it. Yes its a great way to start building credit. Also as your secured CC try to keep your balance 1-9% reported balance in the statment. 6months to 12months from now it will help you with your score.

The key is paid it on time and being patient is the key.

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 08:57:22 GMT

Hi stickyrice,

Thanks for the reply.

The only items on my report are the Cap One card, a charge off coming off in March 2016, and a collection coming off in April 2016. No loans for well over 12 years. My vehicle is a 1998 and was paid off in 2002.

I am hoping the credit builder loan will give my score a big jump when I get it and then continue to go up as I pay on it and the Cap One card. Have made 7 months of perfect payments on it already but since it is the only line I have it is not enough. Looking to boost at least two of my FICOs to 640 to secure a USDA 100% loan. Right now I have EQ634, TU591, and EX569.

Do you think the credit builder loan would put two of them over the 640 for a mortgage? Potentially want to buy in the next 6 months.

Best,

happygal

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 09:00:18 GMT

@Anonymous wrote:
Has anyone every used a Credit Builder Loan to boost their score? Rate on this one here in Texas where I live is 8.25%. I already have a Cap One secured card and this loan seems like a great way to build my credit without having to come up with the funds myself.

They put the money you are approved for into an account and use it as collateral while you pay off the loan. When the loan is paid off, you get the cash.

Seems an excellent idea to me at the cost of some interest.

What do you guys out there think?

https://www.r1cu.org/loans/personal/

Another one in New Hampshire.

http://www.stmarysbank.com/personal/consumer-loans/credit_builder.asp

Did you notice that their secured card is a great offer if you have bad credit and need to rebuild? It's a no credit check which means no HP and the APR is low for the average secured card. It also is a guaranteed approval. It's says:

R1 VISA Platinum Secured Credit Card
A Resource One Visa Platinum Secured Credit Card is a great way to establish loan history and build your credit. Since your funds are secured in a separate account, no credit report is required.

What’s even better? All applications are approved, every member who gets a secured credit card gets a fixed APR of 9.75% and there’s NO ANNUAL FEE!

Some restrictions may apply

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 09:08:58 GMT

Oh wow the one in New Hampshire isn't bad either. Unusually their secured card has a 0% interest rate. I've never seen that with a secured card. It also graduates after a year. This would work for the folks who are following the "BK to 700 in 24 month plan". It says:

Requires a deposit to fund your Visa Savings Account
0% intro APR on purchases for first 7 billing cycles, thereafter, APR is 14.95%*
2.99% intro APR* on balance transfers for the first 12 billing cycles after account opening, plus 4% transfer fee is waived during the introductory period, thereafter, APR is 14.95%*
Credit limit equal to the amount of your deposit (minimum $300 to maximum $1,000)
Visa® Zero liability protection
Purchase Security and Extended Warranty Protection
Auto rental collision coverage
Travel and emergency assistance services
Build your credit - use your card responsibly; Recommended after one year of establishment to reapply for a unsecured Visa product (subject to credit approval) and your Visa Savings Account refunded.
Free online access to view statements, track expenses, and make payments
The Secured Visa® Credit Card Agreement & Disclosure

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 09:10:15 GMT

IF your charge off and collection are still reporting every month then it will hurt your score every month. It look like you have a very thin file, idealy you want to have 3-4 credit card and minimun of 1 installment loan. Installment loan its only affect FICO score about 10% maybe 15% I could be wrong. The Revolving ( credit card) affect 35% of your score so you want to focus on that. Like I said before the key is being patient and paying them on time will increase your score 6-12months time frame. Work on your credit file and have them age it out longer. Just remember anything new that report to your file with low down your AAoA and lower your score, but it will go up later.

Most mortage lender will pull FICO 04 model, even your score is 640 but you have thin file you may not qualify. However some lender will work with you. I have seen people have low 600s score but have a very thick and long AAoA file still manage to get a mortage.

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 09:13:54 GMT

Okay, I see.

The only other option at this point is for me to get another secured credit card, so between a choice of that or the credit builder loan which do you think is better?

I liked the loan simply because I wouldn't have to give any cash upfront like I would for the secured cc.

Thanks,

happygal

Re: Credit Builder Loans

Imperfectfuture — Thu, 06 Nov 2014 09:30:20 GMT

I would apply for the cap one QuickSilver one.

I JUST started my secured installment loan, after un securing my secured visa. Usually, they unsecured after 2 years, but I qualified early, they also usually only do 24 months on 500, but I got 48 months (did by accident, was getting cold/flu, didn't realize what I was asking for.

You could also get a sub prime card to add to the mix (I used legacy visa, no problems, liberal cls and cli's, only the standard $75 annual fee). I would avoid credit one, get another secured card with Wells Fargo or BOA instead,

With three cards, an installment loan, and working to clean up reports, you should be well on way (the difference between unclean eq 589 compared to clean ex 773 is quite enlightening).

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 09:35:37 GMT

Thanks imperfect.

Was just thinking that I could do another secured cc AND the credit builder loan and have 3 lines working for awhile.

Does that sound like a good plan?

Like the Primor Secured Visa since it doesn't require a credit check and if I can avoid another inquiry so much the better.

Re: Credit Builder Loans

Imperfectfuture — Thu, 06 Nov 2014 09:54:54 GMT

I wouldn't get the primor, would verify they have online payments first. Better to get Wells Fargo or boa secured.

If you don't want to go through them, this comes highly recommended, along with their rebuilder loans:

https://www.sdfcu.org/emv-creditcards

Easy to join. But don't do primor, you want a bank secured card.

Re: Credit Builder Loans

Imperfectfuture — Thu, 06 Nov 2014 09:56:22 GMT

I would then wait a YEAR before trying to buy a home.

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 09:56:50 GMT

Okay, will check the one at the link.

Primor is thru First Choice Bank though.

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 09:58:43 GMT

I wish I could wait that long but really need out of this high rental at the beginning of 2015. I'll be stretching it to last another 6 months here.

Re: Credit Builder Loans

Imperfectfuture — Thu, 06 Nov 2014 09:59:17 GMT

No primor. Skip the card if thinking if primor,

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 10:01:10 GMT

Okay, ixnay the Primor.

Looking at the link you sent now. Don't see a secured personal loan with them. Do see the secured cc.

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 10:04:05 GMT

Also, I don't have enough cash to put on another secured card and a loan, so am looking at the loans that are approved and the cash put into an account that you then pay against. Like the one at the Texas credit union I first referenced.

Re: Credit Builder Loans

Imperfectfuture — Thu, 06 Nov 2014 10:04:22 GMT

@Anonymous wrote:
I wish I could wait that long but really need out of this high rental at the beginning of 2015. I'll be stretching it to last another 6 months here.

Building credit is not a quick fix, I've been reading these forums, etc, Get a cheaper rental unit for a year. Until your reports are clean, your scores won't jump up as much as you think. This is rebuilder forum, so you need to rebuild, and credit doesn't pop up that fast (especially fico 04, which is typically what mortgages use, and is lower than the fico 08 scores, and I presume you are pulling the scores from this site).

We all want it as quick as possible, but it doesn't work that way, sorry.

Re: Credit Builder Loans

Anonymous — Thu, 06 Nov 2014 10:06:54 GMT

I def understand that...just not enough money to move, etc. so it is sit here and sweat it out for another 6 months and then try. Need to get a 640 on at least two of my scores...one is already 634, one is 591, and the other is 569.

Re: Credit Builder Loans

Imperfectfuture — Thu, 06 Nov 2014 10:08:09 GMT

@Anonymous wrote:
Also, I don't have enough cash to put on another secured card and a loan, so am looking at the loans that are approved and the cash put into an account that you then pay against. Like the one at the Texas credit union I first referenced.

Apply for a cap one quicksilver card. You will get it. It will be low, but go up in six months.