Lending circles are a great way for people who are unable to qualify for credit cards to kickstart their credit. A lending circle is a type of installment loan where a group of people put money into a pool each month that can be loaned by each person in the group. This continues until each person has contributed and received a loan amount.
In doing this, people involved in lending circles can build their credit history by making timely payments each month. For this to actually count, the lending circle needs to be through an organization that tracks payments and reports them to a credit bureau.
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