You can mitigate these risks by making a budget that factors in your monthly payments before borrowing, and by shopping around for a lender that offers the most affordable loans possible. Some lenders will even refund the interest you pay as long as you pay back the loan on time.
As mentioned above, credit builder loans can help your credit – but they could also hurt it if you don’t make payments on time. If you’re taking out a credit builder loan to try to boost your score, these tips can help to ensure your efforts are successful:
- Monitor your credit report to keep tabs on progress: If you check your credit once a month as you pay off your credit builder loan, you can make sure your positive payment history is being properly recorded. You can also check your credit score regularly to see that it’s climbing.