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Credit-builder loans
Building credit from zero · Lesson 11 of 22 · 3 min
A credit-builder loan works in reverse: you make small payments first, the money sits in a locked savings account, and it is released to you at the end. Some credit unions offer them for $25 a month.
You end with two things: a year of on-time installment payments on your report, and a small pile of savings you could not spend along the way.
Compare the total fee, not the rate. A reasonable program costs $10 to $60 in total for the year.
Takeaway
A credit-builder loan turns forced savings into payment history. Compare total fees.
Next up: Authorized user, and rent that counts