Secure Credit Cards vs. Credit Builder Loans: Which Is Better for Aspiring Homeowners?

Rebuilding your credit for a mortgage? Two of the most recommended tools are secured credit cards and credit builder loans. But which one fits your goals?

Secured cards require a cash deposit and report monthly like a traditional card. Credit builder loans are installment loans where you “repay” a savings account over time. Both build credit, but secured cards help with utilization, while builder loans add installment history.

A 20-point score jump saves $50–$100 monthly and $18K–$36K in interest. Secured cards fix utilization (30% of FICO). Builder loans add installment history and savings. Use both to boost credit mix (10% of FICO). Every month you rent is lost equity. This choice controls your rate, timeline, and home.

If your utilization is high, start with a secured card. If your file is thin, go for a credit builder loan. Want the fastest results? Use both. Pay on time, keep balances under 10%, and check your progress in 90 days.

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