My brother is 26, and his credit was ruined by his ex-girlfriend. Long story. So, Im trying to help him re-establish his credit so he can get “his own place”! 
I offered to contribute $500 towards a secured loan with my bank, but I will not co-sign. Is my impression correct, that he can give the bank $500, then they will secure the $500 and loan him $500 which he will pay back monthly in order to build credit?? Or is this just a rumor I heard somewhere? Any suggestions appreciated. Thanks!
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6 Comments
He can apply for a secure credit card. If you put out $500.00, that is how uch the card will have as a limit. They usually return the money after one year of monthly payments on time, then it becomes a regular credit card. They will, after good payment history, raise the credit limit after a year.
As far as you co-signing, if he is getting a secured card, there is no co-sign needed. He will not be able to get a loan until his credit improves. But he can get a secured credit card, using cash that they will hold for a year.
As a suggestion, do not use the card for more than 1/2 of the limit, as this shows them irresponsibility with money. (It will lower your credit if you max the card, best is 50% or even 30% only used on it at all times.)
Check with the bank though on this. Each may have different rules about it.
Hope this helps.
First I would ask the bank if they even report to all 3 major credit reporting agencies. Even if this hard-money loan scheme works it might not show up on his credit report and help his score.
Does he have any credit open at all? Might try a Discover card 1st and pay it off monthly small balances.
It depends on the bank’s policy. At Bank of America, the minimum loan is $5000 for a five year repay period. A secured credit card may be a good alternative, but I was declined by B of A.
yes..they will
Quick bad credit loans lend you money very quickly if you need cash for any emergencies. But the primary aim of these loans to give you easy access to funds to clear your dues quickly so that you do not face any penalties like late charges and negative credit remarks that can affect your credit score.
Do not be careless in paying off your outstanding dues. If you do not have the cash, apply for a quick bad credit loan to pay your dues. This will save you from any penalties imposed by your lender. If you fail to meet your financial obligations, your lender will charge late fee, raise your interest rate and report you to the credit bureaus. This will lower your credit score and create problem for you with the other lenders and creditors.
Not all banks will do a secured loan. A secured credit card from some place maybe the better choice. No co-signer needed for that. Just make sure the card is paid on time and used. Make sure the card is reported to the credit reporting companies. That would be the best start in my opinion.
If you want to restore your credit, the best way to do this as I found in my experience is to apply for a secured credit card.
When I fixed my credit I applied a got 2 cards. My credit score went from 480 to 622 in a matter of 6 months. Just make sure you make on time payments and keep your balance below 50% of your total credit line.
I have listed a site below that has consumer information on credit card comapnies that issue credit to people with bad credit.
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