Now you have our permission to struggle with disbelief — if you’ve ever experienced bad credit first hand. Once your score falls below 500, it starts to feel like you’re struggling in quicksand: Anything you attempt to do to escape might actually pull you further into the abyss.
The deepest point of that abyss: filing for bankruptcy, which one would hope gives immediate relief but — surprise — it continues the damage to your credit score for a while.
Seven Years of Bad Credit
Black marks theoretically remain on your credit report for seven years, but in practice the carnage drags longer than that due to the interest that creditors continue to charge against unpaid balances.
Meanwhile, people with the lowest credit ratings tend to see abundant advertising for solutions to bad credit that actually add to the problem.
The fees are typically steep yet the full details are often buried in fine print and in a way that leaves out the requisite math you need to do to make the right decision.
And while credit industry people might suggest another solution to fixing a bad score — becoming an authorized user on the account of someone who has good credit — well, good luck convincing someone to do that favor for you.
Lend Money to Yourself
A truly refreshing alternative to this comes from a startup that has engineered a way for people to rebuild their credit scores by lending money to themselves.
Repay this easy loan and this startup, called Self Lender, reports your good behavior to the credit bureaus. For this service, Self Lender collects about 14 percent of the value of that loan if you repay it in monthly installments over the course of two years.
Interestingly, Self Lender initiates this service without making what credit industry professionals call a “hard” inquiry of your credit report, which helps prevent further damage to an already weakened credit score.
Nice Details
Another nice detail: You don’t have to lend yourself that much to get the benefit of this service. Additionally, it’s not limited to people who have poor credit, so anyone looking to raise their score for whatever reasons can use this service.
If seeing is believing, then you might want to watch the brief video embedded to the right to learn more about how this service works.
So far, we’ve yet to find any other service that does what Self Lender offers, but it won’t come as a surprise if competitors emerge in the future.
If you’ve actually seen another offering that appears similar to Self Lender, readers, could you tell us about it by posting in the comments section beneath this post (and we’ll even credit you with the tip)?
While we’re asking you questions, readers, could you let us know your opinions of this type of credit score fixer? And do you mind commiserating with us what kind of debt situation are you looking at right now?
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Read More
- Bad Credit? Get Approved with the Shopping Cart Trick
- The High Cost of Bad Credit
- Five Reasons Why Saying No to Credit is a Good Idea
- 10 Best States to Live in with a Bad Credit Score
- Why You Should Check Your Credit Report and Credit Score
- How to Raise Your Credit Score by 200 Points
- How Do Credit Card Companies Make Money?
- Looking for Great Rewards Credit Cards? Check These Out
- How to Transfer Money From a Credit Card to a Bank Account
Jackie Cohen is an award winning financial journalist turned turned financial advisor obsessed with climate change risk, data and business. Jackie holds a B.A. Degree from Macalester College and an M.A. in English from Claremont Graduate University.
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