Hi {first_name},
We gave you the basics of what a Credit Builder Loan looks like in our last email. Here we’ll give you more details so you can understand them better.
If you already have established credit, these are not for you. They really only help you if you need more credit accounts on your credit report.
To remind you, a Credit Builder loan is one where the money you borrow stays in an account that you don’t get to withdraw from until the load is paid off. Here are a few tips on how to best use one of these loans.
Stay within your budget. Don’t pick a payment that you can’t comfortably afford. Remember, this is about building credit, not getting a big loan, especially since you’re not getting that money till the end.
Don’t get a term longer than 24 months. It doesn’t benefit you any more and you’ll just have to wait longer to get the funds.
Always make timely payments. This one should be obvious. No point in getting this loan if you’re not making all payments on time! If you can, set an automatic payment with your bank.
Keep an eye on your credit score. You don’t need to check it every month, but maybe every other month and see if you can see a trend of increased scores.
Have a specific plan for the funds once it’s paid off. You might even just want to leave that money there in case of emergencies. This will help you keep your credit score up if something happens and you need to use it to cover bills.
You can find these types of loans at some Credit Unions or Online Banks.
Good luck!
Next, we’re going to look at another factor in your credit score, your Credit Mix.
Sincerely,
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