Your credit score can be a gift or a burden, depending on your situation. A good credit score can mean the difference between being approved for the loans that let you attend your dream school and being denied. But for income share agreements (ISAs), a credit score is only part of the equation.
In fact, many schools that offer an ISA option with Meratas don’t penalize students for a lack of credit because of their youth or student status. Some schools don’t even have credit thresholds for their ISA students. These allowances for lower credit scores mean that your financial past doesn’t have to define your future.
Meratas provides student-friendly Income Share Agreements to help alleviate the financial stress in your learning journey.
Learn more about Meratas here.Why Is Good Credit Important?
Good credit opens more financial doors for the holder than having bad credit or no credit. A great credit score can unlock lower interest rates on loans, better financing options for big purchases, and more. It matters for everything from getting a good car loan, financing the camera you want to start your photography career through a lender like Affirm, or getting a loan from the school of your choice.
Having a bad credit score or none at all may make lenders a bit wary of giving you the financial support that you need. Lenders tend to see bad credit as proof that you don’t take financial obligations seriously, or that you’re just unable to keep your promises to repay them. And even if that’s not the case, you might end up feeling trapped by a string of denials.
What’s a Good Credit Score?
A good FICO Score is generally considered to be anything above 670. Credit scores can range from 300 to 850, with 300 being the worst and anything above 800 being considered perfect credit.
FICO scores come from the Fair Isaac Corporation, which consistently updates its model for determining people’s credit scores. Equifax, Experian, and TransUnion are the three credit bureaus, who keep track of your information and calculate your FICO score separately to give lenders an idea of how you’ve handled your financial past.
Credit scores are calculated through a combination of payment history, amount of debt, length of credit history, new credit, and credit mix. The first three are mostly self-explanatory.
New credit is how often you open new lines of credit. If you open too many in a short amount of time, creditors tend to look poorly upon that. Mixed credit is the mix of different types of credit that you have, including credit cards, mortgages, and more.
There are a few ways to raise your credit score. Though an income share agreement may not help you improve your credit score immediately, it can help you boost your income, which can give you more opportunities to improve your credit. Not only can an ISA be a path to a higher income, but many funders also don’t take your credit score into account at all when deciding to give you an ISA.
What Is an Income Share Agreement (ISA)?
An income share agreement (ISA) is a binding contract between a funder and an ISA recipient that allows students to promise future pre-tax monthly income in exchange for an education. This agreement is essentially an income-contingent loan where funders look at your potential in the field as opposed to your current financial situation.
The hope for both sides is simple: students get to learn with little to no initial financial investment, and educators get to broaden their horizons by admitting more students. ISAs come with student-friendly features: the minimum income threshold, payment window, and payment cap.
The minimum income threshold is relatively self-explanatory. You don’t start paying back your ISA until you’re earning above a certain annual income before taxes. This minimum income threshold varies greatly depending on the program, field of study, and expected career outcome.
It can be anywhere from $30,000 to $70,000 depending on these factors. This function also works the other way, where most funders allow you to pause payment if your income ever dips below your minimum income threshold for any reason.
The payment window is the amount of time in which the funder has to collect all the required payments needed to satisfy the ISA. Many schools track this feature differently. Some of them continue counting your payment window if your payments pause, but others also pause the payment window if you do fall below the threshold.
What if the ISA recipient starts paying but has to step away from their job for things like health-related reasons and therefore stops paying? If the payment window elapses, they are relieved of their ISA. This feature incentivizes schools to give ISA recipients strong training for a short and satisfying job hunt.
Lastly, the payment cap is the maximum amount that you’ll ever pay to satisfy an ISA. This figure varies between agreements, and some schools even allow ISA recipients to hit incentives or pay early to lower their payment caps.
This feature rewards students who find higher-paying jobs, as they can pay above the minimum each month to end their ISA obligations more quickly and enjoy more of their income after graduation. This feature also ensures higher-earning graduates aren’t penalized with a higher amount of required payments, as they’ll already be paying more.
These agreements have an advantage over many other payment options as they align incentives between funders and recipients. Students receive a quality education with skills that are in demand throughout the industry. Funders get the peace of mind that they will get paid once students can comfortably do so with their future income.
How Can an Income Share Agreement Help My Credit Score?
An Income share agreement can’t help improve your credit score just by making regular repayments. However, If you have no credit or bad credit, an ISA can still be a path to a better career. You’ll be able to study without worrying about your payment obligations.
And because the amount you’ll be paying is indexed to a fixed percentage of your monthly pre-tax income, you’ll have consistent and manageable payments that remove any guesswork if you sign up for an ISA.
ISA Schools that Look at More Than Just Your Credit Score
By now, you’ve learned about some of the features of an ISA and how they can help you regardless of your credit situation. And you still have a wide variety of options when it comes to high-quality schools that put less weight on your credit score account when awarding ISAs.
We’ve covered the array of programs that offer ISAs before. And even if you have a less-than-ideal credit history, many options are still available to you.
Income share agreement students can start careers in cybersecurity, sales, and software development, even without spotless credit scores. These options are made possible thanks to these educators’ partnerships with Meratas, all of whom work to ensure that anyone can improve their future without worrying about their past.
- RapidAscent
RapidAscent provides fundamental and advanced workforce upskilling in cybersecurity so companies can maintain their operational training in the latest technologies, threats, and best practices. This training is matched by a state-of-the-art academy to match corporate skills needs and bring full cyber education to candidates with non-traditional backgrounds into the field.
Cybersecurity has a major need for skilled professionals, with around $1 trillion in losses last year and nearly 500,000 unfilled cyber positions in the US. You can help fill this need after studying at RapidAscent, where the company execution team has decades of experience in cyber training, controls, and both offensive and defensive cyber approaches.
RapidAscent promises the chance to build in-demand skills at a high level using cloud-delivered adaptive learning driven by AI, gamified live-fire threats, real-world on-the-job projects, and coaching from industry experts through its RapidAscent Workforce Training and the Academy programs. Its LinkForce© Cloud Service connects hiring corporations and the program’s learners to facilitate efficient and durable hiring processes.
In its ISA program, you pay no tuition upfront. You can attend your entire course without worrying about payment, only beginning to pay when you land a job making above a certain salary. RapidAscent allows its students to enter a rapidly-growing industry in a curriculum designed alongside numerous industry partners, without an upfront payment pressure. - Virtanza
Virtanza offers short, high-impact online sales programs that accelerate motivated learners’ paths to employment in Technology and Professional Sales.
First, a sales aptitude assessment arms each student with their personalized inventory of best-suited sales roles, including technical sales, indirect sales, new business development, and more.
Then, for eight to 13 weeks, students meet in synchronous, experiential classrooms with Master’s-level Certified Instructors and Coaches to research case studies, conduct role-plays, and participate in peer review, group assignments, and more.
With every meeting, learners hone their skills and plan the next steps to take in their sales career. The program culminates in a Sales Profile within Virtanza’s Employer Portal, a subscribers-only matchmaking site that introduces program graduates to the hiring managers and recruiters who are keen on the level of expertise and credentials Virtanza’s sales programs produce.
Virtanza partners with a growing number of higher-learning institutions to offer its ACE Learning Evaluations Service-recommended sales courses. This allows graduates to apply credit earned towards a degree or professional certificate.
Virtanza’s Technology Sales, Professional Sales Ready, Sales Management One and Two, and Sales Fundamentals for Entrepreneurs programs are all available for students to start monthly. The upside: you don’t have to quit your day job to upskill. Classes are held in evening hours to accommodate busy daytime schedules.
Virtanza sales programs are designed to fuel learners to achieve meaningful, rewarding employment, faster ramp-up and results, upward mobility, and career satisfaction. The organization offers a limited number of ISAs for its Technology Sales Program, currently enrolling at UMBC-Training Centers and the University of San Diego.
Like every Meratas ISA, this school’s student-friendly features make it an appealing option for people who want to enter the sales field or just add sales skills to their toolkit. - Lambda School
Lambda School is a coding bootcamp that offers students their pick of several tech programs. Its flagship course is its six-month full-stack web development course, where students learn HTML, CSS, JavaScript, React, Python, SQL, and more. Students can also choose to take a nine-month backend development course, where they study software engineering using Java in a course that the school co-developed with Amazon.
Lambda School’s ISA is available for all of its programs, including full-stack development, backend development, and data science. Students make 24 payments at 17 percent of their income until they hit a payment cap of $30,000, complete all of their payments, or satisfy the agreement in another way. As with every other ISA, students don’t start paying until they have a job earning at least $50,000 per year.
These ISA programs have helped thousands of students collectively chase their dreams without worrying about their pasts. Your credit history shouldn’t define your entire life, and with multiple options for students that want to make a change, ISAs may offer a fruitful path.
Income Share Agreement: An Accessible Path to a New Career
An income share agreement is an investment in your future potential as opposed to your financial past. Even if you have a less-than-stellar credit history, many ISA funders are willing to give you that extra chance you need to make your life better.
You have multiple strong options for programs that are willing to take a chance on you as well. Educational institutions with diverse courses in cybersecurity, software development, data science, sales, and more are offering high-quality programs with a deferred cost. These programs recognize that real life happens outside of your credit score, and they’re willing to consider that during the ISA process.
In most cases, ISAs also offer a grace period after graduation to allow graduates the chance to find a strong qualified position. And if you end up having to pause repayment for any reason, Meratas offers several benefits that can help you get back on track, from deferment with a simple application process to cap paydowns that can lower your financial obligations while you learn.
If any of these schools sound good to you, apply today.
About us: Career Karma is a platform designed to help job seekers find, research, and connect with job training programs to advance their careers. Learn about the CK publication.
