Let's face it. Life happens. You have an extended illness; your child ends up in the hospital; you lose a job - all of these can contribute to you falling behind on your payments to creditors, negatively impacting your credit score. It's not like we intentionally set out to screw as many creditors as we possibly can. I guarantee that 99% of people with low credit scores ended up with bad credit due to some factors outside of their control.
No matter the reason for getting behind in your payments and ultimately ruining your credit score, there is hope.... and it's much easier than you might think.
Do a quick Google search for "Credit Repair" and you'll see millions of pages dedicated to improving your credit. Unfortunately, some of the advice ranges from bad to downright illegal. Many people establish or begin to repair their credit through the use of a secured credit card, which generally provides a credit limit equal to the amount of money you deposit. Secured credit cards can be an excellent tool for rebuilding your credit.
It is well-known that a mix of account types is better for your credit score than having just one type. Credit cards are known as "revolving" credit lines - and having 2 or 3 revolving credit lines on your credit report can show you are a responsible borrower. But to truly maximize your credit score, it is suggested you also have an "installment" credit account in addition to your revolving credit lines.
Enter the credit builder account from selflender.com. I have tried several credit builder services, but selflender.com has turned out to be my favorite.
How a savings account can help improve your credit score
Essentially you take out a loan for $550, $1,000 or $1,500. Instead of sending you the proceeds of the loan, the money is deposited into a Certificate of Deposit savings account for the term of 12 months.
Each month you will make a payment to selflender.com and in turn they will report the account to the 3 major credit bureaus: Equifax, Transunion and Experian. At the end of 12 months, Self Lender will send you a check or you can roll it over to a new "loan". *The best part about this is the program forces you to make a monthly payment to yourself. So you are learning good savings habits while improving your credit score at the same time.
How is this different from a secured credit card?
A secured credit card requires you to make a deposit into a savings account. Some initial deposits can be fairly high and it may be tough for someone to come up with the cash needed for the deposit. With a Self Lender account, there is no deposit required.
How much does this cost?
The fees are very reasonable. My first loan with selflender.com was for $550 with a monthly payment of $48.50 for 12 months. Total paid = $582. I received a check for $550 at the end of the 12 months.
How much will this raise my credit score?
Each person's credit is different, so it is difficult to provide any estimates. In my case, I saw an increase of 100 points on my FICO score.
I encourage you to do your own research and to see what selflender.com has to offer. If, after doing your research, you determine this is for you, by all means sign up.. With so many fraudulent credit repair services vying for your attention, Self Lender is a breathe of fresh air and definitely a service that I can stand behind.