The Score Builder loan is used to build credit history. It is a savings account that acts like a loan so that your deposits are reported to the credit bureaus. Once the loan is paid off, you have access to the money in the account.
To be more specific, the funds from the loan are disbursed into a Certificate of Deposit (CD) that is held as collateral for the loan. When the loan has been paid in full, the funds in the CD are then released to you.
Credit history is built by making on-time monthly payments for a minimum of 6 months to 1 year. The minimum loan amount is $100.00, max amount is $2500.00. The term of the loan is then set based on the loan amount desired (with a max term of 2 years). The interest rate of the loan is set at 2% above what the CD the funds are being held in is earning. For example, a 12 month CD earns .05% APY. The interest rate for a 12 month loan would then be 2.05% interest. You earn the interest on the funds in the CD while paying on the loan."
Credit history is built by making on-time monthly payments for a minimum of 6 months to 1 year. The minimum loan amount is $100.00, max amount is $2500.00. The term of the loan is then set based on the loan amount desired (with a max term of 2 years). The interest rate of the loan is set at 2% above what the CD the funds are being held in is earning. For example, a 12 month CD earns .05% APY. The interest rate for a 12 month loan would then be 2.05% interest. You earn the interest on the funds in the CD while paying on the loan."
