 TITLE: How Secured Loans Can Help Your Credit CONTENT: What Is a Secured Loan?\n-----------------------\nA secured loan is one that requires you to pledge an asset to act as a guarantee against the money you borrow. It may be cash the lender sets aside in a special deposit account, stocks and other investments, a vehicle or real estate. Whatever you use to back a loan, that security lowers the risk a lender assumes when it lets you borrow the money. In the event the loan goes into default, the lender won't have to take you to court to recoup its losses. Instead, the lender can take the collateral.\nBecause secured loans are less risky for lenders, you can get one even if you haven't developed a positive credit history yet, or if you already have damaged credit.\nIn fact, there is even a type of loan that's meant for people who need to build or rebuild their credit. It's called a credit-builder loan, and usually comes in increments of $300 to $1,000. Credit-builder loans are unique because the lender deposits the loan balance into a savings account instead of giving you the money. You are expected to make fixed payments for a predetermined number of months.The lender reports your activity to the credit credit bureaus (Experian, TransUnion and Equifax). When the loan is satisfied, the lender will give you the total balance, which may include any interest you paid. In that way, credit-builder loans are not only a way to develop good credit, but will help you save money for the future. END