What type of financial support can help clients rebuild credit?

Secured loans or credit-builder loans are effective financial support options that can significantly aid clients in rebuilding their credit. These types of loans are specifically designed for individuals looking to improve their credit scores.

Secured loans require the borrower to provide collateral, which reduces the lender's risk and often makes it easier for clients with poor or limited credit histories to obtain financing. By making on-time payments toward these loans, clients can demonstrate their ability to manage debt responsibly, which can positively affect their credit scores over time.

Similarly, credit-builder loans work by allowing clients to make monthly payments that are reported to the credit bureaus. These payments contribute to a payment history, which is a crucial factor in credit scoring. While the funds from a credit-builder loan may be held in a savings account until the loan is repaid, the process of consistently making payments can help establish a positive credit profile for the client.

In contrast, avoiding all use of credit cards, exclusively using debit cards, or only receiving cash payments do not provide a mechanism for building or improving credit scores, as these methods do not establish a credit history. Therefore, they are not effective strategies for credit rebuilding.