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If the words “credit score” tend to send a shiver down your spine, then you may have heard about credit builder loans?
We’re all human, and sometimes life’s challenges can lead to a missed payment. It could be a medical emergency, a sudden job loss, or simply a genuine oversight. The point is it could happen to anyone and anytime.
Unfortunately, the credit scoring system is an unforgiving, unrelenting machine that doesn’t care about your personal circumstances, your finances, or your feelings.
Even the smallest financial misstep can have the biggest impact on not just your credit, but your life, too.
The companies that provides credit builder loans believe they help individuals establish or improve their credit score. Here’s how:

What are credit builder loans?

The main aim of credit builder loans is right there in the title – help you build or rebuild your credit.
What credit builder loans do is allow you to take on a small amount of debt by taking out a loan. However, you don’t actually receive any money; not straight away. The lender places the money in a savings account, and you make fixed monthly payments towards this account over a predetermined period. The lender will then report your repayment history to the credit reference agency. As long as payments are made on time,  this will demonstrate the fact you are a reliable borrower. Once you’ve paid off the balance, the lender will release the funds into a savings account of your own. This may also include accrued interest.
Credit-building loans are a great way of building up your credit score, but what if you don’t have the luxury of time?

Do Northern Community Bank offer a credit builder loan?

At Northern Community Bank, we don’t have a loan product to especially help build your credit score. We do of course take credit scores into account when dealing with an application. However, unlike other lenders, we consider more than just numbers when assessing loan eligibility. Firstly, our decisions are made by real people, not computers; meaning your credit score isn’t the be-all and end-all. Also, we don’t offer different interest rates on loans purely based on your credit history. Meaning you will never be charged more or less for borrowing money because of your credit score.
And the best bit? Northern Community Bank reports to the credit agency Experian and TransUnion for all loans taken. This means as long as the correct payments are made on time, your credit rating will improve.
Our good money management assistance doesn’t stop there, either. Northern Community Bank’s ‘Save as you borrow’ scheme helps you to build up your savings as you pay back your loan. So, the next time an unexpected expense pops up, or the lure of a holiday gets too much, you’ll be in a far better position to pay.
Northern Community Bank is committed to offering products and services that help account holders manage their money and build up a history of financial responsibility.
Although we don’t offer a credit builder loan, if you have any questions on the products and services we do offer, please don’t hesitate to contact the team.

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Whether you’re curious about our services, need help managing your money or want to share your own experience with Northern Community Bank, we’re here for you.

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