Financial Well-Being

Lending Circles Help Build a Strong Credit History

Katherine Canales is a bilingual housing counselor of Ecuadorian and Salvadorian descent who works with the Latino Economic Development Center (LEDC) in Maryland. She is an honors graduate of Trinity Washington University and uses her own experience with a social lending program called “Lending Circles” to help others fulfill their dreams of owning their own home or small business.

She explained, “When I first heard about Lending Circles, my first thought was ‘oh cuchubal, my mom does that all the time.’ I was able to quickly grasp the concept because it is a common practice among my culture. The moment I heard it would help me build my credit history, I knew I had to participate. My goal for 2015 was to become a homeowner and I knew that the first thing I needed to do was to improve my credit score and save as much as I could. Through Lending Circles I saw the opportunity to take care of these main tasks in order to achieve my goal. I wanted to improve my credit score to qualify for a mortgage and use my loan distribution for the home buying process. Never in a million years did I think that a few months later, I would actually be a homeowner.”

Katherine Canales (shown here with her fiance) credits Lending Circles with making her dream of home ownership come true.

Lending Circles Launch in D.C. Virginia, Maryland

Capital One is proud to partner with organizations that support these Lending Circles. In California, there’s the San Francisco-based Mission Asset Fund (MAF). And, in July, we partnered with the Mission Asset Fund and the Latino Economic Development Center and Northern Virginia Family Service to launch Lending Circles in Washington, D.C., Virginia and Maryland. The organizations are working locally to help members of low-income Hispanic communities safely build credit with zero-interest loans. Loan payments made through Lending Circles are reported to credit bureaus, and the average credit score increase for participants is 168 points.

Lending Circles draws on the immigrant tradition of peer borrowing to empower members of communities to support one another in savings goals. Participants agree on a regular schedule for each to contribute a predetermined amount until everyone receives a disbursement, which locally will range from $500 to $2,500. All payments are made electronically and are reported to credit bureaus, enabling participants to build a credit history, raise credit scores and work towards greater financial stability.

“Without credit scores, there are no ‘good options’ when you want to start a business or get a small loan,” said Jose A. Quinonez, CEO, MAF. “Now, with the support of Capital One and partners like LEDC and NVFS, together we are providing a solution that works right here in the nation's capital."

Helping Build a Strong Credit History

LEDC's asset-building programs around homeownership and entrepreneurship are most successful when clients start with a solid credit history. — Marla Bilonick

“We were so excited to be selected by Mission Asset Fund to provide Lending Circles to D.C. area clients because credit-building is a critical piece for achieving financial empowerment and building wealth. Lending Circles give LEDC another tool to help our clients improve their financial well-being and fulfill their dreams," said Marla Bilonick, executive director, LEDC

“Our clients are hardworking, extraordinarily motivated entrepreneurs. The NVFS Escala Program simply provides them with the missing skills and information to help them overcome barriers that many low-income immigrants face when starting a business,” said Adrienne Kay, Escala program manager, NVFS. “One of those barriers is credit and access to capital, and we are thrilled that through our partnership with MAF, our clients will access affordable loans, build credit history, and prepare for a financially stable future.”

As part of their Building Entrepreneurial Economies program, the Virginia Department of Housing and Community Development has partnered with NVFS to further the expansion of Lending Circles in Virginia, with a particular emphasis on Prince William County.

For more information on Lending Circles, visit