The higher your score, the more likely you are to qualify for credit, whether that’s a new credit card, an installment plan for a household appliance, or a mortgage on a new home. A high score also helps you get better interest rates. When it comes to a big loan like a mortgage, a high credit score can save you tens of thousands of dollars over the term of the loan.
On the other hand, a low score indicates that you’ve had trouble with credit in the past and may have problems repaying the money you’d like to borrow now. That can make it difficult to get approved for credit at all, let alone get the best rates. It also makes you vulnerable to predatory lenders, such as pay-day loans, who are happy to lend you money when you’re desperate but will charge you insane amounts of interest.
No score indicates that you have no history of using credit at all. This makes it difficult for lenders to decide whether you’re a good risk or a bad one. (Spoiler alert: they’ll usually decide you’re a bad risk.)
Even if you’re not planning on taking out a loan or getting a new credit card, a low score can still hurt you. You may pay more for insurance, have a harder time finding a landlord willing to rent to you, or need to pay a deposit when setting up utility accounts.
A low credit score can make it difficult to access the credit you need to build a better life, but if a low score is holding you back, don’t worry—we can help.
How Our Credit Builder Loan Can Help
Remember that 35%? One of the best ways to build credit is to make your payments on time, every time.
When you use the Build credit builder, you take out a $520 loan—but you don’t spend it. We simply set it aside for you in a special account. Every month, you make a $25 payment, which is reported to the credit bureaus, helping to build your credit.
After 24 months, you’ve paid back your loan, boosted your score, and—bonus—you walk away with $520 in cash, a nice little nest egg that you can set aside for emergencies (no more predatory pay-day loans!).
The exact number of points you gain by using Build will vary from person to person. People with no credit may see a bigger boost than people with low credit, for example. Typically, we see scores rise by as much as 60 points just by making a few of these low monthly payments. It’s important to continue to make these payments for the entire term of the loan, however, so that you don’t risk losing your progress.
How to Build Credit for a Better Future
Build serves as a kind of on-ramp to the world of credit—a world where you can qualify for the credit you need to build a better life at the best possible terms.
