Save to Build Credit

Build Credit, Build Savings

AFS has launched a credit building program called Save2Build. The goal is to support people with a safe, low-cost credit building option. We know that information in our credit reports is used by numerous institutions such as tenant screening companies, utility companies, employers, and of course credit based services, too. 

We also know that people need options to establish and rebuild their credit and things like secured credit cards, while wonderful products, are not available to everyone. So when we were approached to take part in this program, we jumped at the chance. We have partnered with the organization Justine Peterson to provide this program.  The program works in conjunction with the financial counseling services we provide and combines goal setting, credit building, and financial counseling. So let’s take a look.

Under Save2Build, the borrowed funds are not distributed directly to you as they would with a traditional loan. Instead, they secure the loan and are deposited into a locked savings account. You make  12, small monthly installment payments over a year. Each monthly payment made toward the loan is reported to the credit reporting agencies which will reflect positively on a credit report and may raise a credit score. At the end of the loan term, the funds are returned to the you from the locked savings account, providing an instant savings cushion that the you can use to continue to build credit or savings over time. 

Justine PETERSEN is a not-for-profit corporation based in Missouri and they also founded a Community Development Financial Institution (CDFI) -  Great Rivers Community Capital (GRCC). Great Rivers Community Capital funds the loans for this program.

There are  few situations where this program is beneficial for people. These include:

• Credit invisible – someone with no activity in their credit report. They may have had activity at one time, but there are currently no active trade lines like credit cards, student loans, car loans, etc. 
• Thin credit profile – someone who only has one revolving line (credit card/charge account) or an installment (loan) line on their credit report. 
• Collection debt only. Someone who does not have positive accounts on their report. 
• Someone who has been denied products or services in the past and understands the importance of having a strong credit score.
• Someone who has recently been discharged from a bankruptcy.

And finally, this is a program for people who have credit scores of roughly 600 – 580 or less. People with scores over this amount do not typically see enough of an improvement to benefit from the additional payment history. 
 

One thing to note - It will take a minimum of 6 on time payments before a FICO credit score is generated. An increased credit score is not guaranteed.

For a full program description, including loan costs, view the Save2Build Flyer.

Contact a counselor today to find out how you can improve your financial wellbeing! 888-282-5494