Credit Builder Loan
Start building credit the right way
Improve or establish your credit with an easy-to-manage loan from RBFCU. Our Credit Builder Loan is there to help you start or re-establish your credit history while you build savings for the future.
Here's how our Credit Builder Loan works
1. Request a Credit Builder Loan
Go to your Online Banking account, select “Credit Builder Loan” from the loan options and complete a short application. You’ll be required to select a loan term with a minimum of six months.
2. Make your payments
Your loan funds are held in your savings account while you make payments for the full term of the loan. You should plan to make regular payments through the loan’s scheduled completion date. Making these payments allows you to establish a regular payment history on your credit report.
3. Receive your funds
Once your loan is paid off, the funds will be released and available for your use. Dividends earned are released monthly throughout the loan term and are available for your use right away. We report your payment history to the credit bureaus, which can help demonstrate your creditworthiness as a future loan candidate.
Who should apply for a Credit Builder Loan?
• People who have not yet built their credit history
• People seeking to improve their credit
Anything else I should know about a Credit Builder Loan?
- A Credit Builder Loan does not provide immediate funds for member use. Instead, the funds are secured in a savings account until the loan term is complete.
- You can request an amount between $300 and $2,500 for your Credit Builder Loan. Your loan term can be between six and 36 months.
- Members ask if they can pay off their Credit Builder Loan early. However, regularly scheduled monthly payments are important to building credit. If you secure a Credit Builder Loan, you should plan to make regular payments through the loan’s scheduled completion date.
Improve your credit score with free financial coaching
Let Coach Lea show you how!
Your credit score is one of the most important measures of your financial health. Lenders use your credit score as an indicator of your creditworthiness. The higher your score, the easier it will be to secure new loans or lines of credit at lower interest rates. If you have a low credit score, not only can it be more difficult to secure financing, but you’ll also pay much higher interest rates.
Now, it’s easier than ever to get tips for improving your credit score with the help of Coach Lea, the Virtual Financial Coach from GreenPath Financial Wellness. It’s free, secure and available to offer automated, personalized financial advice day or night. We’ll show you how to:
- Pull your current credit report
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Simply answer a handful of questions related to your goals, and Lea will provide you with step-by-step guidance tailored to improving your financial wellness. In just a few minutes, you can walk away with an action plan to strengthen your credit.
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What is a Credit Builder Loan?
A Credit Builder Loan is a loan designed to assist members with no credit or past credit problems as they strive to establish a better credit history. The money borrowed is secured in the member’s savings account while regular payments are made. For more information, visit our Credit Builder Loan page.
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How much will a Credit Builder Loan improve my credit score?
There's no guarantee on how much a Credit Builder Loan will improve your credit score, because many different variables can affect your credit score. However, your credit report will reflect your successful completion of on-time, scheduled payments, which shows your commitment to being a responsible consumer.
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Is there a fee to get a Credit Builder Loan?
There are no fees associated with applying for a loan. With a Credit Builder Loan, you will be required to pay interest on the loan, but you’ll receive a portion of that interest back in dividends on your funds monthly throughout the duration of the loan.
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Once I pay off the Credit Builder Loan, will I qualify for another loan with RBFCU?
Successfully completing a Credit Builder Loan doesn’t automatically qualify you for additional loan products. In every lending situation, our underwriters take a holistic review of your loan request, credit history and financial standing. However, the Credit Builder Loan is reflected as being paid on your credit report, so lenders may take this into account as a reflection of your financial responsibility.
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What's the difference between a Credit Builder Loan and a payday loan?
A Credit Builder Loan allows you to hold a specific amount in an RBFCU savings account and make regular payments until you’ve paid the full loan amount. This loan option is intended to help you build a strong payment history that can be reflected on your credit report and considered when you make future lending requests.
Payday loans, which RBFCU does not offer, provide instant funds for use, often at extremely high interest rates. If you currently have a payday loan and are struggling with high interest rates, you may want to consider refinancing those loans with an RBFCU personal loan.
The granting of a Credit Builder Loan does not guarantee future loans. Subject to credit approval. Specific rate and term dependent upon your credit rating and other factors and subject to change without notice. Some restrictions may apply.
Federally Insured by NCUA. Equal Housing Lender.
