Credit Builder Loan

[Anonymous]

DH and I went to our credit bureau this morning and got their credit builder loan.  It's $1000 to be paid back in 12 months.  The loan is deposited into our savings account and frozen for a year.  We make bi monthy payments of $46.  At the end of the year they release the 1000 to us.  Interest rate was a little over 6%.  They report to all 3 credit bureaus and said it would appear as a "revolving" account on our CR.  Basically I guess we're "buying" our credit.  It'll cost us a little under $200 to have this loan and build a good history with our CB along with hopefully pushing our FICO up a bit.

[chartley3]

That is interesting. This almost sounds like what some companies did with the buying your way as an AU that FICO just slammed the door on.

[Anonymous]

~nevermind..I figured it out! lol 

But how do you liken being an AU to actually having a loan from a legit lender? 

Message Edited by kims on 07-13-2007 01:21 PM

[chartley3]

Because you dont have access to the actual money until you pay off the loan. I understand the concept but to me its like applying for a Line of Credit and I cant touch it until I pay the lender X amount of money.

[Anonymous]

Lasalle Bank has that same loan program for rebuilding credit with a prime lender.  

[Anonymous]

I kinda see what you're saying...we didn't find out until we got to the CU that it would be frozen in our savings.  I can think of alot of things I could have done today with an extra $1000 but that mentality is part of the reason I'm where I'm at today with my credit.  It's a good lesson for DH and I ~ we need to learn to leave money sitting sometimes.  I came from a family that would blow and go and never learned how to be financially responsible.  So..there that 1k sits and hopefully in 1 years we'll be a little wiser on how it's spent.