Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
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Are you looking to improve your credit score? A credit-builder loan might be the perfect solution for you. At O1ne Mortgage, we are committed to helping you achieve your financial goals. Call us at 213-732-3074 for any mortgage-related needs.
A credit-builder loan allows you to make fixed payments into a savings account over several months. At the end of the term, the lender will return the balance of the account to you, possibly including some of the interest you paid. This process helps you build a positive payment history, which can strengthen your credit score.
If you have poor credit or no credit history, a credit-builder loan can help you establish a record of trustworthy financial behavior without using a credit card. Here’s what you need to know.
Unlike traditional loans, a credit-builder loan works in reverse. Instead of receiving a lump-sum payment, the lender sets aside a certain amount of money in a savings account. You then make monthly payments toward that account. At the end of the loan term, you get access to the balance. You’ll pay interest on the loan, but the lender may return a portion of that interest or the interest earned on the savings.
The benefit of a credit-builder loan is that the lender typically reports your payment history to the credit bureaus, helping you strengthen your credit with on-time monthly payments. Additionally, you’ll build savings you didn’t have before, making a credit-builder loan doubly useful.
Credit-builder loans generally come in increments of $300 to $1,000 with six- to 24-month terms. For example, if you apply for a $1,000 credit-builder loan with a 12-month term and a 5% annual percentage rate (APR), you’ll pay $86 per month, including $27 in interest. At the end of 12 months, your credit union will return the $1,000 to you, plus any dividends earned.
Getting a credit-builder loan isn’t the only way to boost your credit profile. Here are some additional strategies:
Credit-builder loans are a financial win-win. They offer the opportunity to build credit and savings simultaneously, at relatively low interest rates and with the chance to earn dividends. They’re a wise choice if you’re looking to kick-start your credit journey or get back on track. By improving your credit score, you’re taking one of the most meaningful steps possible to make your financial dreams a reality.
For more information on credit-builder loans and other financial services, contact O1ne Mortgage at 213-732-3074. We’re here to help you every step of the way.
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