Remember the credit pie graph? Its time to address the last piece of that pie. Installment loans are the hardest to get but extremely important to re-establish your credit. Don't worry we will show you what to do.
Self Credit Builder Loan
What you need to know about a Self credit-builder loan
Self, previously known as Self Lender, is an online lender that offers credit-builder loans meant to help people build credit and save money. Self recommends its credit-builder loan for people with “a very poor or fair FICO® credit score (below 670).”
A credit-builder loan is a small loan that typically ranges between $300 and $1,000, according to the Consumer Financial Protection Bureau. Self’s credit-builder loans range from $520 to $1,663.
You can apply for a Self credit-builder loan directly on its website. But instead of receiving the loan amount within a few days, you can make monthly payments toward your account to pay off the amount you’ve been approved for. After it’s paid off in full, the loan funds will then be distributed to you.
Self lets you choose between four different monthly payment options: $25, $35, $48 or $150. And you can choose a loan term between 12 months and 24 months to pay off your loan. The company will place your money in a certificate of deposit, or CD, and you’ll receive the funds once you pay the full loan amount.
Self reports on-time payments to the three major consumer credit bureaus, Equifax, Experian and TransUnion, which makes its credit-builder loan a good way to build credit — as long as you make payments on time and in full. Self says this loan is ideal for anyone with fair to poor credit. So if you’ve had a hard time qualifying for a traditional loan or credit card, this lender may be a good fit for you.
Opening a credit-builder account can also be a good option for anyone who struggles to save money. Self will place your payments in an FDIC-insured CD until your full loan amount is reached.
You have the option to pay off or close the account early — but you’ll incur a maximum fee of $5 if you do that. Self will also report the loan as paid off early to the credit bureaus, which helps you avoid a delinquent account if you can no longer afford payments.
Self charges a non-refundable $9 administrative fee for setting up an account.
And if you want to make your monthly loan payments with a debit card, you’ll have to pay a $0.30 + 2.99% convenience fee per transaction.
Keep in mind that you’ll also pay interest on the loan, even though you won’t receive your funds until your account is paid off.
Creating a good relationship with a credit union can be very beneficially for your credit.
The loan requirements are often times less stringent than regular banks.
Credit unions usually have a credit building loan program.
Once you have established a relationship, you can apply for car loans and personal loans.
The interest rates at Credit Unions are usually less than banks.
Banks having been making more of an effort in lending to people with bad credit.
You should check with your current bank to see if they have a credit builder loan program.
Before applying, make sure you have a good chance of being approved.
It would be best if they did not do a hard credit pull.