Am diligently working on rebuilding my credit fro the ground up. In my time here @Bev, @sara, @lweston and others(that aren’t coming up in the menu)have helped me grow in my credit repair/building efforts. I’m grateful for that guidance. Thank you all.
Anyway, this is about credit builder loans, pros and cons. So, I read up on credit builder loans and think it would be beneficial overall. One, it establishes a line of credit or a loan amount. Two, it’s reported to all three credit bureaus(ie: self lender), that helps raise your score in increments(based on on time payments). Three, after paying the loan agreement, you get the lump sum back, minus the interest. Four, it adds to the credit mix. Though credit mix is only a small portion of how your credit score is affected, it helps. And finally, an on time payment of the credit builder loan helps your score too.
Now a con of a credit builder loan. After you finish paying it off, the account closes. This may affect your length of credit account factor of your credit score.
Am I on point about this?