Your credit score is among the main factors that help you qualify for credit and set your rates. If that number is below the good credit threshold, you might be stuck with high interest rates and expensive monthly payments.
One way to address this issue is a personal loan to improve your credit. These loans are designed specifically for borrowers who want to raise their scores. However, they come with the same risks as any type of loan. Consider the benefits and drawbacks before applying.
Credit-builder loans are designed for those with little credit, no credit or poor credit, so their eligibility requirements are much more flexible. Dara Duguay, CEO of Credit Builder Alliance, explains: “These loans are less risky for the lender since they hold the money until the customer has made all their required monthly payments.” That allows lenders to lower their eligibility requirements.