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Credit Builder Loan
Mr. W came to Justine Petersen in November 2006 for credit building. Over the course of a few months, Justine Petersen worked with Darrow to pay off a few remaining collections. After clearing up all credit issues, Justine Petersen staff prepared Mr. W's file for loan application at a local financial institution. Once approved, Mr. W worked with a Justine Petersen real estate agent to find the right home and he closed his mortgage loan in June 2007. He is thankful to Justine Petersen staff because he achieved his dream of owning a home.
Loan Amount: $150.00
Interest Rate: $30.00 Flat Fee
Term: 12 months
Monthly Payment: $15.00
Collateral: Unsecured
Market: Housing or Microenterprise client
In its work assisting low- and moderate-income families to access affordable mortgage products, Justine Petersen staff identified that many of their clients have low credit scores not as a result of negative credit, but the lack of good credit. Justine Petersen introduced a Credit Builder Loan in September 2006 to put active lines of good credit on credit reports. The Credit Builder Loan allows their clients to establish or re-establish credit and become more competitive in the mainstream financial market. Justine Petersen began reporting to TransUnion in September 2006 and to Experian in 2007 as a member of Credit Builders Alliance.
Client successes documented
- In July 2006, Ms. C had $4,500 in unpaid collections and a $1,500 civil judgment. She had no good lines of credit. Her credit score was 457. In September 2006, she opened a Great Rivers Credit Builder Loan and a US Bank Secured Credit Card. She made no payments on her collection debt or towards the civil judgment, but she made six on-time payments to her Great Rivers Credit Builder Loan and her US Bank Secured Credit Card. In February 2007, she still has $4,500 in unpaid collections and a $1,500 unpaid civil judgment and her credit score is 557 - a 100 point increase.
- Ms. J filed Chapter 7 Bankruptcy in January 2006. In September 2006, her credit report accurately reported zero balances on all accounts and no credit score. She opened a Great Rivers Credit Builder Loan and made six on-time payments. In February 2007, her credit score was 637.
Justine Petersen Housing & Reinvestment Corporation is a not-for-profit based in St. Louis, Missouri. Its mission of connecting institutional resources with the needs of low-moderate income families so they may build long- term assets is obvious by its products, which include homeownership services, micro-enterprise advocacy and lending, and Individual Development Accounts (IDA). Great Rivers Community Capital (Great Rivers), a for-profit corporation and CDFI wholly-owned by Justine Petersen, was created to expand the financial products offered to the clientele of Justine Petersen.
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