Thought credit builder loans were a scam but tried one anyway

I saw ads for credit builder loans everywhere and figured they were just another way to trap people in debt. But after my score stalled at 640 for like 8 months I gave up and tried one through my credit union in Denver. Put down $500 as collateral and paid $45 a month for 12 months. My score jumped 32 points after just 6 months of on time payments. Turns out adding a mix of installment loans actually helped my credit mix like people said. Has anyone else here gotten a real boost from these or was it just me?

2 comments

2 Comments

rivera.jake9d ago

32 points in 6 months is pretty solid, I got 28 points from my credit union's version in Phoenix. Put down $600 as collateral, paid $38 a month, and it felt like I was just paying myself back anyway. Still a weird system when you think about paying to build credit when the bank's holding your own money hostage.

dakota1607d ago

Paying interest on your own money just to get a bank to report a loan feels like a raw deal to me.