When we talk about getting loans or credits, the options are many. Here in SafeLoan.com we will guide guide you how to use a how to use a self-credit builder
When we talk about getting loans or credits, the options are many.
You see, there is a whole market dedicated to offering people different ways to get a loan or opportunities that suits their needs. Because each credit has its charm, such as its conditions and rules of use.
If you have ever been looking for credit before, you will already know how important your credit score is, and the bad thing about this is that if you don’t have a high credit score, getting a loan with the right interest rates and without high fees can be difficult.
That’s why many of the people who want to get a credit but also have a low number in credit scores, opt for getting a self-credit builder.
But, of course, it also has its advantages and disadvantages.
And that’s actually one of the hardest things about getting credit, choosing which credit to stay with taking into account the good and the bad things. That’s why in this article we are going to tell you what you need to know to get a self-credit builder.
How does a Self-Credit Builder work
The interesting thing about this type of credit is that, with it, you can start generating a good credit score in case you don’t have one, or yours is very low.
It is an effective way to improve your credit history without having to go through too many cumbersome processes. Besides, it is one of the most profitable ways to generate money with credit, because with each monthly extra interest your income increases and that’s money for you, instead of paying it to a lender.
Remember that the credit score is important during your financial journey and the entirety of every financial process you’re getting into.
Having a solid payment history represents at least 35% of your score and having a good credit history constitutes 15% of your score, which would be approximately the average of your total score.
Like everything else in this type of banking procedure, it requires patience and time to achieve the objectives.
So, creating a good credit score takes time, because it’s something that you “reap” as far as you show yourself responsible with your payments and debts.
Basically, a self-credit builder account works like this:
- You open a self-credit builder account.
- You request credit with a credit application.
- Once you’ve approved, you agree to the terms and conditions of services with the bank/financial institution that is giving you the credit.
- You start making monthly payments on the account.
The funds that are being deposited into the account will be placed in a Certificate of Deposit (CD) and then returned when the agreed time expires by check or direct deposit, depending on what you select when according to the financial institution.
Some of the people who have been using this self credit card, assure that they have noticed a significant improvement in their credit report in the first three months.
Which is not bad at all if you are looking to improve your credit history.
The useful life of the credit account depends on the monthly payments you choose, they can range from 12 to 24 months.
As a result, this ensures that your score will continue to increase with monthly payments on time.
So recapitulating the basic operation of this type of credit, and putting it in a little simpler words, we could say that with a self credit, you will rebuild your credit without having to go through the tedious and compromising process of applying for an additional loan or line of credit.
Well, the commitment will be all with yourself, as you will receive a small guaranteed personal loan that you made yourself.
How much does a self credit builder cost?
Having a better idea of how much it can really cost you to make a transaction, will always leave you a clearer picture of how much you are really going to spend and how much you are going to earn.
And of course, the value and economic expense involved in each action is an important and priority factor when making decisions of this kind.
So before deciding to use this type of credit, you must keep in mind that to use your credit-builder account, the financial institution that you choose charges a one-time non-refundable administrative fee of $9.
Once you know that, you have to decide how much you would like to pay monthly to help you reestablish your credit.
You can start with a low amount (whatever is within your means) for example, you can start with only $20 and after 12 months you will already have $240 saved.
But if in your case you are looking to establish a faster credit amount, there are also options to pay between $35, $48, or $150 per month for a year or the time you choose.
This means a bigger credit-building loan, of course.
About the APR (annual percentage rate), it will also be lower than what other creditors might charge, including those of cars and credit cards.
Because you have the option to settle your account in advance without penalty, so the interest account you decide to pay depends entirely on you and your possibilities and needs at the time.
It is necessary to mention in this review that all certification of deposit accounts are endorsed by the FDIC up to $250,000.
Now, in case you are looking for another type of loan, give us a call and we’ll guide you through it. Our staff will attend to you and drive you through all the credit options that fit you.