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How’s it going everybody this is beat the bush today i’m gonna talk about how to build your credit score even if you have a really low credit score like 600 and below generally when you have a credit score of 600 and below you can’t get credit so how can you get credit when you don’t have credit so it becomes like a chicken and egg problem generally the most popular
Way to build your credit when you have a score of 600 and below is to get a thing called a secured credit card it’s where you pay something like $500 they secure that they hold onto that money and then you use a credit card as usual it’s just kind of used as a collateral so that in case you don’t pay they can use that to pay for whatever you spent there’s actually
Another way to build your credit which is called a credit builder loan generally they’re offered by credit unions and community banks but now you can actually get it through a website called self lender which means you can just get it online now this video is actually sponsored by self lender but i’ve reviewed their product and i see that yeah it’s a good product
To help people that are in the low credit score range to build their credit faster so in accepting that and i actually would recommend it so that’s why i’m doing this video now to get back to what a credit builder loan is it’s not like a traditional loan where you borrow money to buy something motorcycle laptop or something where you actually get the money and
Then you get to spend it what happens here is that you get the loan the self lender company they hold this money and they actually put it in a cd account so they actually have collateral in case you default or something like that and they can take that money and you know pay back themselves in case anything happens the good part here is that when you get a secured
Credit card and a credit builder loan you can build your credit much faster that way now we know that if you get a higher credit score you actually get a lower interest rate when you go get a car loan a mortgage or whatever so a lower interest rate represents a huge chunk of money that you can save when you actually get those things now if you don’t actually plan
To use your credit score to get a mortgage to get a car loan or something then you actually don’t need the credit score but most people do when you do get the loan and you see that your credit score is higher for some reason maybe because of this credit builder loan it can represent a huge chunk of money because let’s say you get an apr of i don’t know 5% and
Instead because of your high credit score it’s four point five percent over the life of that loan it’s gonna be like thousands of dollars depending on the amount you borrow it’s gonna be a huge chunk of money so this credit builder loan actually costs money now let me review what this company is trying to sell now before i get into the product itself i’m gonna
Convince you that i’m actually really good at my own credit score and i know what i’m talking about at one point my credit score is actually 848 out of 850 shown by this letter right here actually it’s back in 2013 those while ago i’ve shown this in other videos before so i kind of hold this kind of like my badge or something is like like flashing though this is
My badge i mean i know credit now here is something more recent and you know since then i didn’t care about my credit score so much i’ve been getting credit card canceling the you know just taking advantage of the points and stuff because when you have a credit score of 800 plus you know i’m not even really using it all that much so you can see you know the past
Credit history right here it’s hovering right here 829 26 825 25 30 20 635 828 26 30 26 29 so it just kind of hovers around there and you know it’s it’s great it’s it’s up there and i don’t really care if it stays at 848 or something just as long it’s above 800 i’ll still get the highest of the highest interest rates if i ever take a loan out so that’s proof right
Here now let’s get on to the product itself so what is a credit builder loan exactly self lender is actually a startup company and they’re based in texas they have this arrangement with austin capital bank where the process goes like this they have one single product which is in the value of eleven hundred dollars since then they actually have something divided by
Two and multiply it by two so you can have different demanding nominations of this law really you can get the lower one and you’ll still represent that you are actually a responsible pair of this self builder loan initially you sign up with them you have to give them $12 for a fee to start up this loan and what happens is right immediately self lender will deposit
Eleven hundred dollars into the austin capital bank and this money you actually don’t have direct access to it because it gets deposited in the cv it gets 0.1% apr now if you watch my other videos you’ll know that a really good apr is actually 1.0 five percent right now so it’s kind of me easily but you’re not really trying to do this for the apr here because at
The end of the loan you’re only getting gonna get about a dollar ten worth of interest what you’re doing this for is to show the credit card companies that you’re a responsible payer of alone even if it’s to yourself so you pay this twelve dollars and subsequently every single month you pay ninety seven dollars to self lender and at the end of 12 months there’s
Only a single year term over here so you do this 12 times every single month at the end you’ll get one thousand one hundred and one dollars and ten cents back so in a way you are paying yourself you’re just putting it into a savings account time after time every single month and at the end you get a large chunk of money what is actual fee here you you’re paying
Twelve dollars and fees you’re paying a little bit of these every single month from an interest rate that you pay self lender for lending you this $1,100 it’s not lending it to you but it’s lending it to austin capital bank it’s to you really but you don’t get to hold it there you putting it in the bank for you at the end of the full year you got to know how much
You actually spend in order to put a good mark on your credit score this is $74.90 for this particular product now my analysis on this product is that man i certainly will nair pay money to get a better credit score given that i have a really good credit score a’right however if you have a really low credit score you’re kinda in a pinch because if you’re below
600 it’ll take you a long time to build your credit with just secured credit cards if you add on this product this senate builder loan thing you can build your credit a little bit faster and if let’s say you want to use your credit maybe one year later it’s actually a good thing to speed this up just as a side note secured credit cards and credit builder loans are
Things that help you build your credit if you have us credit score of below 600 but there are other things you can immediately do to fix your credit this is kind of like a credit repair type of thing where you get a free credit report look through comb through the whole credit report and see if there’s any mistakes and then you go fix them all if you do this you’ll
Boost your credit score in min sleep just by doing that there are other tips and tricks in my advanced finance playlist so go check those out there’s a trick that you can do in your credit card payments to help boost your score so when i look at this a red flag goes up for me the thing that concerns me is that if you’re paying this ninety seven dollars every month
And you have a low credit score your low credit score kind of demonstrates that maybe you cannot afford to pay ninety seven dollars every month maybe eight months in you’re gonna miss a payment so the best way i think is maybe if you have some extra cash already in your savings account more than eleven hundred dollars then this might be less of a hit risk for you
However if you are going from paycheck to paycheck you really shouldn’t get this even if you have our low credit score because you’re just gonna get this waste twelve dollars and then later on you’re not gonna make the payment and you’re just gonna waste money paying in all these fees so if you get this you really have to make sure that you’re going to complete
The whole year worth of payments at the end of the payment you’ll have this nice chunk of money that you can reinvest in this cd actually don’t recommend a key in here because it’s only 0.1% take it out put it in a synchrony bank that i recommended put it in discover online bank you’ll get a higher interest rate and then you can you know just building your nest
Egg that way one of the things i look at when i look at this is what if you default what if you don’t pay this what happens yes it will negatively affect your credit score because this place is going to report to the credit bureaus that yeah you have this loan and you defaulted or you missed a payment or something so it will negatively affect you what you can do
To mitigate this risk is that if you know you’re going to be late you can actually cancel out this loan you can just close this account and not be late and you’ll actually get your money back so – the interest rate that you have to pay for the months only that you’re an a member now let’s say you want to cancel out the account in the middle of this period because
You know you’re not going to be able to make the payment you can do that without negatively affecting this whole process you can just kind of cut it short and they won’t report like a late fee or anything like that or a late payment and what ends up happening is these 97 dollars that you are putting in you actually get back most of it now you still have to pay a fee
If you go through with it for the whole year you have to pay $74.90 but if you go half way through you’re actually not paying for the interest throughout the whole year of borrowing this $1,100 so the actual interest rate it’s gonna be vary a little bit but it’s gonna be something like $50 if you cut cut it halfway through just know that you don’t have to as soon
As you sign up for this you’re not gonna have to pay the full $74 now what happens if you’re lately if you completely forgot about this account so for some reason and you’re late actually 80 days it’s going to be reported as defaulted that’s really really bad so you really need to make sure that if you’re not going to make the payment go and closed account this is
The most advisable way to do things if you have a credit score of less than 600 this is the completely legitimate way to build your credit yes you are paying a fee in order to boost your credit but however you do the same thing with secured credit cards as well because some secured credit cards actually have to pay a yearly fee as well think of this as paying in
Order to get your credit score higher i don’t generally recommend paying to get your credit score higher because it should be free you can organically do this but it takes a long time for me it takes over 10 years in order to get my score that high but if you really need it to go up faster you have to pay for speedy delivery of course so $74.90 it’s it’s pretty
Reasonable to me so if a lender actually offers their loans in other denominations such as half of 1105 $550 $1,100 and $2,200 to fit whatever payment plan that you can meet i’d suggest you go conservative here if you think you can meet 100 don’t do the $97 one do the smaller one and really make sure that you can actually pay the payments sometimes one year out it’s
Hard to imagine what can be one year out because even if you have like a couple thousand dollars sitting in the savings account you don’t know what emergencies can happen maybe something suddenly happens and you don’t have the money to pay the payments then you should you can still get this account but you need to know to cancel and close the account immediately
So that it won’t affect your credit score if you’re interested in this part of myself lender don’t forget to check out the referral link down in the video description below and if you actually get a credit builder loan through my referral link you actually help out this channel so that’s all i have for you today i hope you enjoy this way of boosting your credit if
You have a low credit score don’t forget to give me a like over here comment down below if you have any questions about this financial product and don’t forget to subscribe over here thanks for watching
Transcribed from video
How to Build Credit with Bad Credit or No Credit [w/ SelfLender] | BeatTheBush By BeatTheBush
