How to Leverage a Personal Loan to Build Credit


Everywhere you turn it seems like someone wants to look at your credit score to make decisions about what you can and cannot do. Your credit score can impact your ability to purchase a car, get a cell phone, rent an apartment, and even land a job. It is important to have a good credit score so you have access to all the things you need, but there is a long list of reasons why your credit score may be low or nonexistent. Fortunately, there are a number of things you can do to start the process of building your credit.

Basics of establishing good credit

Make all payments on time. Creditors can report you to the credit bureaus if you miss a payment or make a late payment. A simple way to ensure that you make payments on time is to set up autopay whenever possible.

Take out a personal loan. You can use a personal loan to build credit. Getting a personal loan and paying it back on time will have a positive impact on your credit score. It establishes you as a reliable borrower because it lets you prove that you can be responsible with your money. You can use the money you borrow to consolidate other debts. Consolidating debts means that you use one loan to pay off two or more other loans. Consolidating your debts can make it easier for you to keep up with what you need to pay because it leaves you with one payment instead of several. In addition, the loans you consolidated will show up as paid-in-full on your credit score which helps you build your creditworthiness.

Where to get a personal loan if you have bad credit

The idea of using a personal loan to build credit sounds good. The question is, where can you get a personal loan if you already have bad credit? In traditional settings like banks and credit unions, your credit score is the primary factor the lenders consider to determine if you can get a loan. The good news is that there are lenders out there who understand that the credit score does not always tell the whole story. If you meet a few basic criteria, you can get a small personal loan from Tio Rico and use it to start the process of building your credit. Here are the things you need to apply for a personal loan at Tio Rico:

  • You have a Motor Vehicle Registration in your name
  • You only need to borrow a small amount ($100 – $1,000)
  • You are 18 years older
  • You have a Government Issued ID (ex: Driver’s License)
  • You have a checking account and paystub from your employer
  • You have a debit card

If you are ready to start building your credit with the help of a personal loan, reach out to Tio Rico. There are Tio Rico locations in Phoenix, Avondale, Glendale, and Mesa. Find the location that is most convenient for you and get started on the process of building your credit with a personal loan.