Credit-builder loan
A credit-builder loan works backwards: the lender locks a set amount in a savings account, you make fixed monthly payments that report to the bureaus, then receive the money back minus interest and fees.
Why it matters
In the large CFPB-funded study the average effect on credit scores was close to zero; it mainly helped people with no existing installment loan, while about 39% of people who opened one made a late payment on it, which hurts credit.
Example
The lender locks $500 in savings, you pay it off over 6-24 months with each payment reported, and at the end you get the $500 back minus interest and fees. It works only if you have a thin file and reliably pay on time.
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Educational only — not financial advice. No guarantees.