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Fresh Start Product Boosts Credit Scores for 70% of Borrowers

Self-Help Federal Credit Union offers a specific product—the “Fresh Start” loan—designed to help families build or establish a good credit history. Since 2008, more than 2,000 borrowers have used Fresh Start loans. With funding from MetLife Foundation, we conducted a study to see how well the Fresh Start loan is meeting its mission, especially looking at whether Fresh Start helps raise credit scores.

Over a lifetime, the difference between a 650 and 750 credit score could easily mean paying $200,000 more in interest

First, why does a credit score matter? In the financial world, a person’s entire credit history is boiled down to a three-digit number. Almost all lenders rely on credit scores as part of their loan decision, using the score to determine whether a borrower qualifies for a loan and also to set the interest rate. The FICO mortgage credit score, widely used in the U.S., ranges from 300 to 850. There is no single standard for defining a “good” credit score, but people with lower scores pay higher interest rates on loans.

To evaluate Fresh Start’s effectiveness, our study examined who uses the Fresh Start loan and their financial outcomes, with an emphasis on credit score changes. Among our key findings:

  • 70% of borrowers increased their credit score after taking out a Fresh Start loan. The greatest and most meaningful increases came from borrowers with starting scores below 640, those who started out unscored, and younger borrowers.
  • Nearly a third (32%) of borrowers increased their credit score by enough to qualify for a lower rate on an auto loan at Self-Help. These borrowers would save, on average, $3,211 in interest over the life of a typical auto loan as a result.
  • Borrowers who were unscored were able to build an average score of 643, which is at the low end of the “average” credit category. For borrowers who improved their existing score, the average gain was 47 points. However, most borrowers (71%) with high initial credit scores (750 and above) experienced a decline in credit score.

For all findings and more details, see our complete report and/or our press release.

Self-Help Credit Union offers a similar credit-building product—find out more here.

FICO elements figure
According to FICO, a leading consumer analytics company, 90% of all lending decisions in the US rely on a FICO score ( These are the elements of that score.