Whether you’re just starting out or you’ve hit a few bumps along the way, building credit can be difficult. An easy way to start building or rebuilding your credit is with a share pledge/share secured loan.

A share secured loan (what WWFCU calls a share pledge loan) lets you use the money in your savings account to back the loan. Let’s say you have $200 in your savings account. A share pledge loan lets you take out a loan for $200 while freezing your savings account until the funds are paid back. There are numerous reasons to take out a share pledge loan.

• Build Credit – If you have bad or no credit, you’ll find it hard to get credit. But every time you make a payment to your share pledge loan, you’re creating a positive credit history. This will, in turn, boost your credit score.
• Low Rates – Because a share pledge loan comes with little risk to the lender, they also come with very low loan rates. If you get a share pledge loan at WWFCU, your rate will be 1.5%. The rates are fixed for the term of the loan.
• Multipurpose – How you spend the money you borrow from a share pledge loan is up to you. But to play it safe, be sure to use it only for things you really need.
• Convenience – Because there’s no approval process apart from determining how much you have in your savings account, the timeframe to get approved for a share pledge loan is really quick.
• Your Savings is Protected – Because your savings will be frozen until you repay it, you’ll be rebuilding your savings with every loan payment. Once you’ve made a payment, that amount becomes unfrozen and useable.

Keep in Mind

While a share pledge loan/share secured loan is an easy, low-risk way of getting a loan and building your credit, you do need to be cautious of a few things.

• Your savings is frozen till you pay back the loan, so make sure you won’t need access to those funds during the loan term.
• Late loan payments will have a negative impact on your credit.
• Loan non-payment will have a more drastic negative effect on your credit and damage your ability to borrow money in the future.

Click here to learn more about WWFCU’s Share Pledge Loan or you can stop by our branch or call (734) 721-5700 if you have any questions.