Improving Our Credit with Lending Circles
As we all know, credit scores play an essential role in ensuring our ability to be financially stable. With a healthy credit score, our ability to borrow improves, our interest rates tend to be lower and, in the State of Michigan, our car insurance rates are lower. On the flipside, an unhealthy credit score can have a detrimental impact, especially for those of us who are barely getting by. For many people living in poverty, a lack of stable financial resources almost ensure that one will fall behind and have difficult decisions ahead. Do I feed my family or pay my cable bill? Do I pay for rent or pay my electricity bill? Do I use what little money I have for gas to get to work or to pay my water bill? The list of these incredibly difficult financial decisions go on and on…
The best possible option when faced with one of these incredibly difficult choices is to use what little finances exist to pay for essentials...food, rent, transportation...and try to catch up with the bills later. Unfortunately, and because current bills don’t stop, this often leads to a downward spiral with many people getting into deep debt. At this point, credit, loans and payday lenders can help temporarily ease the burden. Often times though, people fall back into the cycle and now have these debts as added expenses. Through this struggle, their credit scores suffer as mounting debt is turned into collections.
As part of the support services that T.E.A. provides, we work with Rebel Nell’s Creative Designers on overcoming their financial burdens. For years, we have held classes with our accounting and financial service partners. This year, we’re excited to announce that we’re taking it a step further! We’ve developed a partnership with Southwest Solutions, a local non-profit who provides a broad range of programs in the areas of human development, economic development and community engagement. Southwest Solutions acts as a liaison in enrolling locals into a program called Lending Circles. Lending Circles brings together friends, family, co-workers, strangers and creates a safe way to build credit, while also lending money. Each month each member of the circle contributes the dedicated monthly payment and every month one member of the circle receives the loan, until everyone in the circle has had their turn. On average, Lending Circle participants see a boost in their credit scores of anywhere from 80-100 points! Beginning this month, our team will participate in their own Lending Circle. We’re looking forward to the results as many of our team members have big goals for the future, goals that could be positively impacted by a credit boost. Our team members are working diligently towards paying down bad debt, obtaining affordable car insurance, becoming homeowners…
We can’t wait to get started and to see the credit dial move a little bit farther to the right!
If you’d like to learn more about joining or forming a Lending Circle visit their website here.