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How to Achieve Financial Success

Become financially savvy.

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One of the best ways of improving a poor credit score is not getting into that position in the first place.

FICO and VantageScore are two of the few institutions that create credit-scoring models that use consumer credit data to generate credit scores. These two institutions calculate one’s credit score in a slightly different way.

The base FICO® Scores range from 300 to 850. For FICO, if your credit score is in the range of 670 to 739, then it is in good standing. Below, you can see how FICO grades one credit score.

  • 300 to 579: Poor
  • 580 to 669: Fair
  • 670 to 739: Good
  • 740 to 766: Very Good
  • 800 to 850: Exceptional

VantageScore has a credit scoring model that allocates credit scores in the ranges of 300 to 850. For VantageScore, their grading system is as follows:

  • 300 to 499: Very poor
  • 500 to 600: Poor
  • 601 to 660: Fair
  • 661 to 780: Good
  • 781 to 850: Excellent

Back to our main discussion, how do you rebuild your credit score? Apart from paying bills on time, reducing the amount of debt owed(credit utilization), raising one’s credit limits, or paying twice a Month, One way you can effectively increase your credit score is by the use of a Credit Builder Loan.

How Credit Builder Loan Works

The concept of a credit builder loan is quite simple. Basically, in a credit builder loan, you deposit the amount you which to borrow in a bank account as you make payments. The amount deposited serves as a safe haven for lenders. Credit builder loans are quite awesome as you get to save your money while building your credit score.

Below are some credit builder loan lenders and what you get in each:

Alltru Credit Builder Loan

Getting a credit builder loan from Alltru entails that the money you borrow will be held as collateral as you make your monthly payments and when your loan is paid off, the money will be released to you. Plus, when you make all loan payments on time, we will refund half of the interest paid right back to you. Alltru credit builder loans come with the following features:

  • A loan amount ranging from $300 to $1,000
  • Loan term of 12 months
  • 12% APR
  • Payment history reported to credit bureaus
  • 50% of interest refunded with on-time payments

The trend is quite similar in all Credit builder lenders and just little perks separate the features they offer. Here are a few more you could check out

  • Self Credit Builder Account
  • Digital Federal Credit Union’s Credit Builder Loans
  • Fig’s Credit Builder Loans
  • USALLIANCE Credit Builder loans
  • Heartland Bank Credit Builder loans
  • Republic Bank Credit builder loans

Credit builder loans work just like other loans. Failure to repay a credit builder loan would still result in a negative effect on your credit score. So, only borrow what you can afford to pay back, and make your payments on time and in full, just like you would do on a regular loan. By following these principles, you set yourself on a better chance of improving your credit score.

Though improving one’s credit score is not rocket science, we always recommend visiting a professional when things get serious.

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