This method is good if you are rebuilding or building credit for the first time. Save $500-$1000 and then visit various banks with your credit report in hand asking them whether they do secure passbook loans based on your savings. Once they agree, ask the loan officer if there is a prepayment penalty, what the interest rate is, and what credit bureaus they report to.
Apply for a 12-month passbook loan, then with the loan from the first bank, go to another bank and open a second passbook loan with a 12-month pay period. Then wait three weeks and go to a third bank and repeat the process with the loan from the second bank. Now, you have three loans at three different banks for a 12-month payment plan. Now start making payments with the loan you received from the last bank. After six months of on time payments, check your credit report to make sure the loans are being reported correctly. Congratulations, you have just established superior credit with three bank installment loans.
As you can see, using the three secured loan method to build credit could be very effective to your building or rebuilding efforts. The key thing to remember in this technique is to always be on time with your monthly bills no matter what situation you are in at the present time. By doing this, you will be on your way to a good credit file. Now that you are empowered with a secret weapon, go out there and take your financial life back
