Building Credit The Smart Way

Have you ever felt overwhelmed by the idea of building credit? Or maybe you wish that someone had taught you about it sooner. Either way, you're not alone. In the latest podcast episode of Making Sense of Money, Tanis sat down with Kylie, Consumer Lending Program Manager at P1FCU, to discuss a new product designed to help you take those next steps in your credit journey.


What is a Credit Builder Loan?

The Credit Builder Loan was created to help members build or rebuild their credit in a safe, low-risk way. Kylie says, "It's a short-term loan with a low dollar amount, so it provides low risk, but helps members responsibly build credit." Unlike traditional loans or credit cards, this loan doesn't immediately give you access to cash; instead, it helps you build a payment history while saving money.

 

Here's How It Works

It's a simple process. First, P1FCU takes the loan funds and holds them in your savings account for the full term of your loan. You make the monthly payments on time, and your payment gets reported to all major credit bureaus. When the loan term is over, the funds are released to you. "You're rewarded," Kylie says, "but you've built your credit as well. So it's literally a win-win."

Why Credit Matters

Good credit doesn't just impact your ability to get loans; it is used in all sorts of decisions, like:
  • Rental applications
  • Job opportunities
  • Insurance rates
  • Overall financial well-being

A solid credit score can help open doors and start you on a great financial path. Kylie put it best: "This is like paying yourself back for a savings account."

 

Ready to Get Started?

You can learn more at our website if you're interested in a Credit Builder Loan from P1FCU. Plus, you can find many other great resources like our Credit Score Workbook. Plus, don't forget to subscribe to the Making Sense of Money Podcast.