PSA: I thought those 'credit builder' loans were a total scam for years.

My score jumped 40 points after I finished a $500 one through my local credit union in January. Anyone have a similar experience with a specific product?

3 comments

3 Comments

margareto261mo ago

Totally had the same doubt! My credit union offers a similar secured loan. You basically pay into a locked savings account and then get the money back at the end. It reports as an installment loan, which helps your credit mix. That mix is a huge part of your score people forget about. Seeing that jump after it reports is the best proof it works.

charlescraig1mo ago

Yeah, it's a weird trick but it really does work. That credit mix part is no joke.

jade5171mo ago

Honestly I thought the whole credit mix thing was just some made up myth for years. Then I got a small personal loan to fix my car and my score went up like 40 points in two months. It felt like unlocking a secret level in a game, totally changed how I look at credit now.