Credit-builder loan
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Backwards on purpose. The lender locks the money in a savings account, you make small monthly payments, and when you’re done, you get the money: credit and savings at the same time.
Check that the lender reports your payments to all three credit bureaus.
From FILE 005: the 5 doors.
Sources
Official and government data first. Every quote is word for word; follow the link to check it yourself.
Consumer Financial Protection Bureau · “What are some ways to start or rebuild a good credit history?”
“Credit builder loans – You build credit and savings at the same time, through a loan from your bank or credit union.”
consumerfinance.gov (opens in a new tab)Experian · “Why Being an Authorized User May Not Help You Get Credit”
“Make sure your lender reports your payment activity to all three credit bureaus.”
experian.com (opens in a new tab)Consumer Financial Protection Bureau · “What are some ways to start or rebuild a good credit history?”
“Credit builder loans – You build credit and savings at the same time, through a loan from your bank or credit union.”
consumerfinance.gov (opens in a new tab)Experian · “Why Being an Authorized User May Not Help You Get Credit”
“Make sure your lender reports your payment activity to all three credit bureaus.”
experian.com (opens in a new tab)