Skeptical about credit builder loans until I saw my friend's score jump 60 points in 4 months

I always thought credit builder loans were just a gimmick to trap people in fees, but my buddy in Austin tried one from a local credit union and his credit utilization dropped way faster than mine did with just a secured card. Any of you tried one and seen real results or still think they're a waste of cash?

3 comments

3 Comments

ivan7741mo ago

Honestly, I get why you say that but "credit utilization dropped way faster" sounds like it's just moving debt around, not really saving you money in the long run. Ngl, I'd rather put that cash into a secured card and keep it simple.

king.val1mo ago

Really depends on how deep someone is in the hole, I suppose. @ivan774 you're not wrong that it's basically shuffling things around, but for some people that temporary drop in utilization is the only way to keep the lights on while they dig out. Secured cards are fine if you have the cash upfront, but not everyone's got a spare couple hundred bucks just sitting around for that. Feels like it's more about what actually works for the person than what's theoretically cleaner on paper.

ward.jamie1mo ago

$350. That was my balance on a secured card back when I was trying to dig out of about $4,000 in credit card debt. I went with the secured route first because I didn't want to keep shuffling money around between accounts. It forced me to only spend what I actually had in the bank, which stopped me from adding more debt while I paid down the old stuff. Took about a year and a half, but once that card graduated to unsecured and my utilization dropped naturally, it felt a lot cleaner than some of those balance transfer games I've seen friends try.

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