Credit Builder Loans

A Credit Builder Loan is a way for you to borrow money using your own savings as the collateral. When you are in a hurry, or need funds but don’t want to tap into your savings, your accumulated savings at 1DCU serve as the security for your loan.

Credit Builder Loans can also help improve your credit score or build credit history. A good credit score makes it easier for you to secure financing for major purchases, such as a car or a house, or even a credit card, at better rates in the future.

Here's how it works: 

  1. You can borrow up to the amount in your 1DCU Share Savings account (minimum $500). The credit union puts those funds on hold and provides you with a loan in the same amount. You may spend it however you wish!

  2. 1DCU will give you the amount you requested in the form of a check or a deposit into your 1DCU checking account. You can make payments on the loan through a monthly automatic withdrawal from your checking account, via direct deposit, online payment portal or by sending in a check each month.

  3. Each month, you make an affordable payment on the loan balance. Your on-time payments are reported to credit agencies which helps improve your credit score. 

  4. When you've completed your payments, your savings are returned to your account. You keep your money while improving your credit score at the same time.

Loan Terms

  • 4.5% APR* regardless of credit score
  • $20 application fee
  • Up to 24 month term

*APR = Annual Percentage Rate

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What are some of the benefits of a Credit Builder Loan?

Interest rate: No matter what your credit score is, we are offering one low rate. We are able to offer a lower rate because the loan is secured by funds in your Share Savings account. 

Quick approval: You can usually get on-the-spot approval for a Credit Builder Loan. The credit union only needs to verify the amount in your Share Savings, approve the amount you want to borrow, and place a hold on the funds you’re using to secure it. Once you’ve been approved for the loan, you can use the money in any way you’d like. As long as you’re a member of 1DCU and you have enough in your Share Savings account to sufficiently cover the loan, we’ll be happy to help you.

How much can I borrow?

The amount is determined by the balance of your 1DCU Share Savings account. You may borrow as much as you like, up to that amount. Keep in mind that the funds in your Share Savings account will be temporarily put on hold during the term of your loan. However, you will have that same amount to spend from your Credit Builder Loan.

Let's look at an example. 

Amount Borrowed APR    Loan Term Monthly Payment  
$1,000 4.5% 24 months $43.65



You are not required to borrow the total amount in your Share Savings account. We will work with you to find a monthly payment that is affordable for you.

Please note there is a $20 application fee which must be paid up front or from your 1DCU account. 

Will I qualify?

Credit qualification is easy, and this type of loan can be used to rebuild your credit history. Our Credit-Builder Loan is designed to help members who have little or no credit history build strong credit.

No matter what your credit score is, we are offering one low rate. We will make the payment affordable for you.

How does this increase my credit score?

1DCU reports your payments to the credit bureaus. We report your payment status, whether on-time or late, to the credit bureaus each month. If you are responsible and pay on time, your score should increase. You should also try your best to avoid late payments. Having a payment reported as late to the credit bureaus will hurt your credit-building efforts.

Can I pay off the loan early?

You may pay off the loan early if you wish, but it will hinder your credit-building efforts. The whole point of a credit-builder loan is to have monthly payments reported to the credit bureaus. The more consecutive on-time payments we can report, the more positive your impact on your credit score will be.

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