HomeTop Global NewsFin techFirst Federal Bank of Kansas City expands product line towards expand low...

First Federal Bank of Kansas City expands product line towards expand low fico market

First Federal Bank of Kansas City recently added the Credit Builder Loan to its retail banking and lending product line serving Kansas and Missouri. The Credit Builder Loan is designed for customers wishing to establish payment history on their credit report while developing a savings foundation.

“Our Credit Builder Loan assists customers without existing credit or low credit by giving them an achievable path toward building credit history and reinforcing the principle of saving,” said Nate Boylan, First Federal’s chief banking officer. “This program empowers individuals to move toward their vision of a better financial future, whether that be renting a property, buying a car or becoming a homeowner.”

The Credit Builder Loan is a short-term, fixed-rate installment loan with a lower interest rate than most credit cards, and does not require an opening deposit. Loan proceeds are placed in a secure Certificate of Deposit on behalf of the customer, and as the loan is repaid, First Federal reports the monthly loan payments to the three major credit bureaus. This helps to establish customers’ payment history, which can account for 35% of their FICO score. When the loan is repaid in full, customers can access the CD plus interest earned.

“We recognize the difficulty of building credit from scratch or restoring negative marks on your credit report. We are dedicated to offering products which support an individual’s capability to improve their financial wellbeing and avoid the debt cycle,” Boylan said.

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