Indialends, 23 Apr 2026

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Top 5 Credit Builder Programmes

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Have you ever availed of a loan? Or did you ever consider one? If yes, then you might be familiar with the concept of a credit score.

When you look for credit, you seek to borrow funds from a financial institution that does not know whether you would repay the funds or not. That is why, before sanctioning the funds to you, the institution has a list of eligibility parameters that check your creditworthiness, i.e., your capacity to repay the debt. Among the different parameters listed, one important criterion is your credit score which gives the lender insight into your credit behavior.

Credit score – the concept

A 3-digit number, the credit score represents your credibility, i.e., your credit behavior and how likely are you to repay the loan. Authorized credit bureaus compute your credit score and make it available for lenders when you seek credit.

The credit score ranges from 300 to 900. A score of 700 and above is considered to be a good score while lower scores are considered bad or average. If you have a bad score or no score at all, you can build up your score through responsible credit behavior. This is where credit builder programs come to your aid.

What is a credit builder program?

A credit builder program allows individuals to improve a bad credit score or build a credit score from scratch. Under this program, lending institutions give you a small loan or a credit card. After this, you are required to make regular and timely repayments on the loan or credit card. This serves two purposes –

1. For those of you who don’t have a prior credit record, a new loan or a credit card helps in establishing a form of credit. This also helps you get a credit score.

2. As you make timely repayments, you can improve your bad credit score. For new credit users, timely repayments help them build up a good score from the ground up.

As your credit score is improved, you become eligible for different types of loans available in the market.

Who is the credit builder program suitable for?

The credit builder program is suitable for the following types of individuals –

● Those who want to clear the outstanding balances of existing loans

● Those who are new to credit and want access to a credit line

● Those who want to improve their existing credit history

● Those who want to improve a bad credit score

● Those who don’t have a credit score and want to establish one

Top 5 credit builder programs

Here are the top 5 credit builder programs that you can choose to improve your credit score –

● Secured credit card

Suitable for – Existing borrowers and new credit users

A secured credit card is one that is issued against the security of an asset. For instance, if you have a fixed deposit account with a bank, you can get a secured credit card against the deposit account.

Since the credit card is secured, the lender has minimal risk of repayment default. The card limit is restricted to the value of the asset against which it is issued. As such, if you default on the repayment, the lender can simply liquidate your asset to realize the outstanding debt.

Secured credit adds to your credit score and if you keep your repayments up-to-date, your score increases.

● Secured loan

Suitable for – Existing borrowers and new to credit users

Similar to the secured credit card is the secured loan. This loan is issued against the mortgage of an asset like a property that you own, your investments, jewelry, etc.

Secured loans also work on the same principle as secured credit cards wherein, in the case of default, the lender liquidates the mortgaged asset to realize the debt. Being a secured form of credit, your credit score improves and if you repay the EMIs regularly, you can build up the score gradually.

● Credit builder loan

Suitable for – Existing borrowers and new to credit users

Specialised credit builder loans are also available with financial institutions. The aim of the loan is simple – to build up your credit score. Under these loans, a loan amount is sanctioned to you which stays in your savings or loan account. You are required to repay the loan in EMIs. Once the loan is paid off, you get access to the funds.

● An authorised user on another’s credit card

Suitable for – Existing borrowers and new credit users

If anyone in your family has a credit card, you can become the authorized user of the card. You can get your name added with the cardholder or get an add-on card available with most credit cards. In this scenario, as the primary user repays the credit card dues on time, your credit score also improves as you are also considered the user of the card.

● Debt consolidation

Suitable for – Existing borrowers

If you have multiple credit card debts, you can consolidate them into a single loan through a personal loan. Then, you can repay your dues in affordable EMIs which not only would make repayments easy but would also improve your credit score.

The bottom line

Credit facilities can come in handy when you need funds, and your savings fall short. However, to access the available facilities, you need a good credit score. So, use any of these credit builder programs and build or improve your credit score. This would improve your prospects of availing yourself of credit in the future so that you can meet your financial obligations, easily!