EO Credit Building
For those with a less than stellar credit score, securing an affordable, traditional loan can pose a challenge. Oftentimes, loans available to individuals with poor credit come with exorbitant interest rates. This is where EO's credit building loan program comes in, providing an alternative and viable solution.
How to Build Credit
According to data from the Asset Funders Network, individuals possessing low or nonexistent credit scores roughly end up paying an additional $200,000 throughout their lifetime for financial products such as loans, credit cards, or mortgages in comparison to those with favorable scores. Securing a loan becomes quite challenging with low credit rating, and those that don't necessitate good credit often entail high expenses. Payday and title loans, for instance, don't demand a good credit history but impose excessively high interest rates, frequently ensnaring individuals in a cycle of debt. Notably, a 2012 Pew Study revealed that payday lenders in Idaho charge an average annual interest rate of 582% — the highest in the nation.
To address this issue, Jannus Economic Opportunity (EO) has introduced a credit-building program aimed at assisting individuals with little to no credit history or poor credit. The program aims to provide access to affordable loans as a means to achieve financial stability and control.
EO has worked with hundreds of individuals and small businesses facing financial needs but lacking a credit history. We offer comprehensive credit assistance, including education, coaching, and tools for building credit, such as small loans. These small loans play a crucial role in improving credit scores as EO reports its lending activities to the three major credit bureaus. Timely loan payments contribute positively to an individual's credit report.
What is Credit in Banking?
Credit represents a summary of your financial history, encompassing your interactions with debt and payment responsibilities. It serves as a record of your ability to meet financial obligations, such as bills and debts. For instance, when seeking to rent an apartment, the apartment manager may review your credit score to ensure a positive payment history. If you lack a credit history or possess a poor credit score, they may assume limited experience with bill payments or a tendency to pay bills late. Consequently, this could lead to rental rejection or increased charges. The same principle applies to no-credit loans—traditional banks may be hesitant to lend to individuals without a credit history. While some lenders, like payday lenders, may offer loans regardless of credit history, they often impose extremely high interest rates, potentially trapping individuals in an endless cycle of debt.
Jannus EO is a Member of the Credit Builders Alliance (CBA)
CBA is a non-profit organization that develops inventive solutions to assist non-traditional financial and asset-building institutions, which cater to individuals with low to moderate incomes. The aim is to enable these individuals to establish credit, enhance financial access, and foster the growth of their businesses or personal assets.
How You Can Help
- 45 million people in the US are without access to affordable credit.
- 16 million people don’t have access to bank accounts. (FDIC).
- 1 in 4 American families turn to high-cost financial services for their daily needs.
- Idaho's rate of unbanked people is around 2.3%
- 25.3% of Idaho households don't have credit cards.
- Payday and title lenders charge up to 600% interest for payday and title loans.
Jannus EO is a Boise-based nonprofit dedicated to removing barriers and providing sustainable resources for low-income individuals, refugees, and other under-served populations in Idaho.
We really value our volunteers! If you wish to organize a class or recommend participants, please get in touch with us. Additionally, we welcome donations to expand our loan fund and further our mission: to help people from all walks of life grow, succeed, and thrive.
