Ready to Boost Your Credit Score?
Your credit score is one of the most important numbers of your adult life.
Think of it as a key that unlocks the door to better financial opportunities, including:
- Easier Loan Approvals
- Lower Loan Rates
- Reduced Interest Payments
- Lower Cost of Car Insurance
- Waived Deposits (e.g., Utility Companies)
- Lease an Apartment or House
- Land Specific Jobs
2 Powerful Tools to Rebuild Your Credit Score
Sometimes life can throw you a financial curveball, and that setback can cause your credit score to drop. But it doesn't have to stay that way. Rebuilding your credit score is easier than you think with the right financial tools.
Credit Rebuilder Loan:
A Credit Rebuilder Loan or Share Secured Loan uses your assets (money in savings) to secure a loan designed to improve your credit score.
How It Works:
An easy way to think of a Credit Rebuilder Loan is like a pretend loan. You're essentially borrowing your own money from the credit union and then repaying the loan.
EXAMPLE:
| Loan Amount | Interest Rate | Term | Monthly Payment | Interest Paid |
|---|---|---|---|---|
| $1,000 | 3.5% APR | 12 Months | $84.92 | $19.06 |
Assume you get a $1,000 Share Secured Loan from the credit union. The credit union will give you $1,000 and put a freeze on $1,000 in your account.
Then, you will make 12 monthly payments in the amount of $84.92. After your final payment, the credit union will have its $1,000 back (plus $19.06 in interest), and you will have access to your original $1,000.
How It Rebuilds Credit:
Payment history plays the most significant role in determining your credit score. At the end of your credit rebuilder loan, you should have 12 on-time payments reported to each of the major credit bureaus - giving your score a nice boost.
Secured Credit Card:
Secured credit cards function like traditional (unsecured) credit cards. The major difference is that secured credit cards require a deposit.
How It Works:
First, you’ll be required to deposit or freeze funds in your account equal to the card’s credit limit – for example, $500. Then, you’ll make small purchases on the card monthly that you can repay immediately.
Every time you make an on-time payment, it will be reported to the credit bureaus – helping to improve your score.
How It Rebuilds Credit:
- Making on-time monthly payments will improve the payment history portion of your score.
- Paying off the entire balance monthly will keep the total amount of your debts low.
- Using the card only for small purchases that you can repay in full monthly will keep your credit utilization ratio low.
Credit Rebuilding Resources:
At Pinellas Federal Credit Union, we are dedicated to helping our members save and earn more. Your credit score plays a significant role in that equation - allowing you to secure lower loan rates and pay less interest.
If you want to discover more ways to improve or rebuild your credit score, we're here to help. Please call us at 727.586.4422 or stop by any branch location.
Credit Rebuilder Guide:
GreenPath Financial Wellness:
At Pinellas Federal Credit Union, we've partnered with GreenPath to provide members with additional resources. GreenPath is a nonprofit with more than 60-years of helping build financial health and resiliency. Their NFCC-certified counselors provide options to manage credit card debt, student loans and homeownership.
*APR - Annual Percentage Rate. Examples used are for educational purposes only. Loan rates and terms are subject to individual's creditworthiness. Some restrictions may apply. Contact the credit union for additional details on these credit rebuilding products.
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