A unique trend is building support in the United States and at the same time is offering a chance for low-income Americans to get something they may have never had before: solid credit.

A recent article in the New York Times outlines how some organizations are giving low-income individuals small loans with minimal payments. The individuals receiving the loans do not actually get the money but keep the cash in accounts that grow as they make payments toward the initial loan amounts. As they consistently make timely payments, their credit scores can grow to respectable numbers.

Residents of Saint Cloud know how hard it is to live without credit cards and some may also understand how quickly credit card debt can become a major life hindrance. While good credit can help a person get a great place to live, a reliable vehicle or even a good job, bad or no credit can keep a person from taking home his full pay due to wage garnishment or other negative credit judgments.

Critics of this new trend speculate that it is better to teach people how to save money than to extend them credit they may not responsibly manage. However, some people are finding that it is easier to owe someone else money than to save one's own money, making credit payments an easier way for some individuals to save.

Whether a person has good or bad credit, everyone has some financial obligations. Having money and good credit can make it easier to cope with the economic swings many people face during a calendar year than being a person who must live paycheck to paycheck. This way of helping low-income Americans improve their credit may be a useful way to get some people's lives back on track.

This article discusses only one possible way of rebuilding individual credit. There are many ways to improve a person's financial situation and legal professionals here in Minnesota are prepared to meet with people who want to learn more about financial and debt relief strategies.

Source: New York Times, "How Credit-Card Debt Can Help the Poor," Shaila Dewan, Feb. 11, 2014