This Simple Tool Helps Build your Credit Score

This is sponsored content on behalf of Self Lender, but all opinions are my own.

We’ve written a lot about credit and credit scores on Young Adult Money, and for good reason: credit dictates how expensive your mortgage or car loan will be.

With a bad credit score or a lack of credit history you may not qualify for a mortgage at all.

Having a good credit score could save you hundreds of thousands of dollars. I think we all know what a huge difference a low interest rate can have over the course of years or decades – and a solid credit score is your key to getting the lowest possible rates.

But not everyone has a good credit score. In fact, if you have bad credit or a limited credit history, you are definitely not alone – and are actually in the majority!

A study by the Corporation for Enterprise Development (CFED) found that 56% of consumers have subprime credit scores. That means they are unable to get the best and unlikely to get even average interest rates when they borrow.

Let’s look at an example of someone who ruined their credit as a result of something that has happened to millions of us: a job loss.

A Real Example of Someone Struggling to Build Credit

 
I read a number of personal finance blogs and I saw a story over at The Penny Hoarder about a guy named Derrick Camber.

Derrick, at 29, lost his job and had to sell his car to keep up with bills. He even had to do what every millennial fears: he moved back in with his parents.

Through his tough times he let a few small bills go. We’re talking $300 or $400 bills that ended up in collections.

Derrick eventually secured a job and despite making $65,000 a year was unable to get a loan for a car because his credit was destroyed.

He tried to take advantage of a credit building loan from a company describing themselves as a “payday loan alternative.” For 12 weeks he took out a $200 loan and paid back $255 the next week.

Not only was he losing over $50 a week due to the insane 29% interest rate, but these loans were not even showing up on his credit report – after 12 weeks! At $200 a month that’s $600 down the drain.

What you may find shocking is that Derrick’s story ends on a positive note: using a different service he was able to increase his credit score 145 points in just 5 months.

Even more shocking is that instead of costing him $50 a week, it only cost him $75. Total.

How Using a Simple Tool Can Build Your Credit and Save You Money

 
Derrick was able to make this massive progress in improving his credit score through a tool that is available to everyone. It’s called Self Lender, and it’s one of the simplest and easiest ways to build or establish your credit.

Self Lender is an online credit builder loan that reports to all three credit bureaus: Equifax, Experian, and Transunion.

Self Lender does not work like a traditional personal loan. Instead, you receive a loan of $1,100 that is put in a CD-secured account in your name. Over the course of a year, you make 12 payments to pay off the loan. At the end of the year, you receive $1,101.10.

What makes this even easier is that payments can be automated each month. So each month you would have $97 automatically withdrawn from your bank account to pay towards the loan.

There is a one-time $12 admin fee and at the end of the year you will have paid just $74.90 to take advantage of the credit-builder loan. Here’s how the math works: $1,164 + 12 – $1,101.10 = $74.90.

Simply put, for $75 you get a year-long loan that is paid back over the course of 12 monthly payments, each reported to all three credit bureaus, with the potential of having a big, positive impact on your credit score.

Remember, Derrick was able to increase his credit score 145 points over the course of 5 months.

After just the first month, Derrick saw a 22-point increase in his credit score.

This just goes to show that someone who is motivated to build or rebuild their credit can see real, material progress if they utilize Self Lender.

Utilize the Tool If You Want a Higher Credit Score

 
If you are someone whose credit has been damaged in the past or who has virtually no credit history, Self Lender is a really great way to increase your credit score.

Self Lender actually has perks for people who already have good credit, too. If you sign up for a free account you will get your credit score and credit monitoring.

I have excellent credit because I’ve spent the past ten years focusing on increasing my credit score, but I signed up for a free Self Lender account to track my credit score and monitor my credit. Credit monitoring at TransUnion costs a whopping $19.95 a month.

Again, I want to stress that if you have limited credit history, Self Lender can be a great way to jump-start your credit. 63% of 18-29 year-olds do not have a credit card.

Here’s what Eric, who had a credit score of 000, had to say about his experience with Self Lender.

I had what is known as a “thin profile” or a credit rating of 000. But as everyone wants to know your credit score for everything these days, I was looking for a way to jump start my credit score and thanks to SelfLender I was able to go from 0 to 639 in less than 90 days! Thank you Self Lender!

-Eric S.
San Francisco, CA
July 27, 2016

 
We have a number of posts on Young Adult Money that discuss improving your credit score and providing clarity on credit scores, but this is the first post that we’ve talked about a specific tool to rebuild a bad credit score or establish credit.

 
 
What have you done in the past to help improve your credit score? Does Self Lender sound like a service that you or someone you know could benefit from using?