The credit builder loan I swore was a scam actually fixed my score

Last March my score was sitting at 542 and every card I applied for bounced back. A friend kept suggesting a credit builder loan at my local credit union in Akron, but I figured it was just another way to trap people in fees. Finally tried it with $500 over 12 months, and they held the money in a savings account while I made payments. Three months in my score jumped 60 points because they reported the on-time payments to all three bureaus. The catch is you need the cash upfront to cover the loan, which is not possible for everyone. Has anyone else tried one of these and seen real movement, or did I just get lucky with the timing of other factors?

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aaroncampbell2mo ago

My credit union in Columbus offered the same thing with $600 held for a year. I was skeptical too, but my score went from 498 to 551 in about four months. The key for me was that they reported the payments as installment loans, which helped my mix of credit types more than the secured card I had. I also made sure to keep my other card balances under 30 percent at the same time, so I can't say the loan did all the work. Your point about needing the cash upfront is real, though. I got lucky that I had the savings, but it's a fair knock against them for folks who don't.

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