Self Credit Builder Review
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Increasing your FICO score can help you qualify for higher loan amounts and lower interest rates. However, getting financial products like unsecured credit cards is difficult if you don’t have a credit profile or have bad credit.
That’s where the Self Credit Builder comes in. Self offers credit builder loans that allow you to establish or rebuild credit. Your payment history will be reported to all three major credit bureaus, typically within 72 hours. This Self Credit Builder review will explore some key details to know about this financial product before getting started.
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What is Self Credit Builder?
Self Credit Builder is a credit builder lender that helps people who want to rebuild credit. Most traditional banks do not offer credit builder loans, causing many people to turn to fintech companies for this financial product. Self offers four credit builder plans, each with 24-month terms. Monthly payment plans start as low as $25/mo and go as high as $150mo, depending on how much you want to pay.
You won’t have to worry about any hard credit pulls if you apply for a Self Credit Builder account. Furthermore, you can cancel at any time if you are having difficulty with making monthly payments. Self gives you the option to make automatic payments on the 10th of each month, so you don’t have to worry about incurring late payments.
Using Self's Credit Builder Account can get you an average credit score bump of 49 points.
- No hard pull
- Automate payments
- Track your credit score
- Reports to all 3 bureaus
- Cancel anytime
How does Self Credit Builder work?
Self offers several credit builder products that allow you to build credit. These financial products do not have any credit score requirements and do not require hard credit checks. You can access these products even if you have bad credit.
Credit builder loans require security deposits that become the loan’s balance. For instance, if you want a $1,000 loan, then you must secure the loan with $1,000. This approach removes the lender’s risk which makes it easier for them to do business with you.
Self will have you make monthly payments and then give you back the principal after the loan matures. Your credit history will gradually improve since payment history makes up 35% of your credit score. A higher credit score can improve your eligibility for more loans and help you secure a lower annual percentage rate (APR).
How much does Self Credit Builder cost?
The Self Credit Builder has four plans that are all 2-year loans. You can pay $25, $35, $48, or $150 per month, depending on how much you can afford. Paying more each month should improve your FICO score faster since it demonstrates you can make on-time payments for higher amounts.
Interest rates vary for each financial product but currently hover between 15.51% APR and 15.92% APR. However, these rates can change at any time.
Self Credit Builder features
Credit monitoring. Self lets you see your credit score for free. Constantly seeing your progress can inspire you to stay on top of your monthly payments and other bills.
Credit reporting. Self reports your payment history to the three major credit bureaus: Experian, Equifax, and TransUnion. These bureaus will update your credit report to reflect that you are able to make on-time payments. This credit history will put you in a better position when you apply for traditional loans.
Secured credit card. After making three monthly payments on time and having $100 or more in savings progress, you can receive the Self Visa Credit Card. It’s a secured credit card, and you can choose what portion of your savings progress becomes your credit limit.
The minimum credit limit is $100. You can then use a secured credit card in addition to your credit builder loan to improve your score. Accounts in good standing have the opportunity to receive higher credit limits, and you don’t have to put up any additional money to obtain this secured credit card.
Ability to back out. If the monthly payments become too much to handle, you can walk away from the Self Credit Builder at any time. You will receive your security deposit back if you cancel.
No credit checks. Self does not issue any credit pulls when giving you the Credit Builder loan or the secured credit card. This feature makes it easier to get started even if you have bad credit or are a credit invisible consumer.
Using Self's Credit Builder Account can get you an average credit score bump of 49 points.
- No hard pull
- Automate payments
- Track your credit score
- Reports to all 3 bureaus
- Cancel anytime
Who is Self Credit Builder for?
People with bad credit
Self is a great resource for people who have bad credit. Making low monthly payments on a credit builder loan can jumpstart your credit recovery. You can end up with a higher credit score which helps you save money in the long run.
Individuals who do not have credit
A Self Credit Builder account is one way to establish credit history and demonstrate that you make on-time payments. A better credit history will help you receive a higher credit limit when you take out an unsecured credit card. The higher limit will improve your credit utilization ratio and compound your FICO score growth.
Consumers who can make the monthly payments
It’s important to assess the money that comes into your checking account each month and how you use it before taking out a credit builder loan. You also need enough money in your checking or savings account to afford the security deposit. If you have no issue with those parameters and need help with your credit score, the Self Credit Builder account may be right for you.
Who shouldn’t use Self Credit Builder?
People who have good credit
You don’t need a credit builder loan if you already have a good credit score and regularly make on-time payments. If you already qualify for most loans and financial products, you just have to stay on top of payments and wait for your credit accounts to age.
Consumers who have limited funds
It doesn’t make much sense to add an additional monthly payment if you are operating on a shoestring budget. Self has a plan that starts as low as $25/mo for people who want to improve their credit without a significant impact on their finances. However, if this is still pushing it close, you may want to consider picking up a side hustle, trimming your expenses, or looking for career advancement opportunities.
Individuals who don’t need loans anytime soon
If you already have a mortgage and an auto loan, you may not need another loan for a long time. In that case, you can take your time with credit building, and a high FICO score may not matter as much. A good credit score is still important for other expenses, such as utility bills and rent.
Pros and cons
Pros
- Self reports your payment history to the major credit bureaus.
- Choose from payment plans that start as low as $25/mo.
- No credit check.
- You can back out at any time.
- Eligibility for a Self Visa Credit Card after three consecutive on-time monthly payments.
Cons
- You must put up an initial security deposit.
- You will lose money with a credit builder loan.
- Interest rate ranges from 15.51% APR to 15.92% APR.
- Consistent monthly payments for two years.
Self Credit Builder vs. competitors
The Self Credit Builder makes it easier to rebuild credit or establish credit history. Once you make enough monthly loan payments, you can qualify for the company’s secured credit card. However, Self isn’t the only company that helps individuals with their FICO scores. Here’s how Self compares with its competitors.
Self | Bright | MoneyLion | Chime | |
Credit Checks | No | No | No | No |
Interest Rate | 15.51% APR - 15.92% APR | 0% APR | 5.99% APR to 29.99% APR | 0$ APR |
Credit reporting | Yes | Yes | Yes | Yes |
Max Loan Amount | $3,600 in total payments | $10,000 | $1,000 | N/A |
Bright
Bright lets you open a credit builder loan with as little as $50. You must then make the minimum monthly payment, which is either $10 or 50% of the balance, depending on which is lower. Bright reports your payment history to Equifax and TransUnion. Bright does not charge any interest, and you also won’t have to worry about any application fees, origination fees, or late fees.
The company has additional financial products, such as credit lines, debt pay-off plans, and personal loans.
MoneyLion
MoneyLion has several financial products, such as Instacash, brokerage accounts, and bank accounts. The company’s credit builder product has a $1,000 maximum amount and does not involve any credit checks.
MoneyLion makes it easy to track your progress and monitor your credit. You will receive personalized insights that can result in a higher credit score. Instacash comes with your credit builder loan and lets you access up to $500 of your pay without incurring any interest.
Chime
Chime offers a secured credit card that does not come with interest or an annual fee. The card does not have a minimum security deposit requirement, but you will have to put in a security deposit to have a credit limit.
Chime reports your payment history but does not report your credit utilization ratio to the major credit bureaus. The lack of credit utilization reporting is an advantage for secured credit cards that usually have low credit limits.
Using Self's Credit Builder Account can get you an average credit score bump of 49 points.
- No hard pull
- Automate payments
- Track your credit score
- Reports to all 3 bureaus
- Cancel anytime
FAQs
Is a credit builder loan worth it?
A credit builder loan can put you on the right path to improving your credit score. A higher score
is worth it in the long run since you’ll get lower APRs on future loans. A high FICO score can
also help you borrow more money from lenders. Creditors heavily weigh your credit history
when reviewing your loan applications.
Should I get a credit builder loan or a secured credit card?
Credit builder loans and secured credit cards both allow you to build credit even if you have bad
credit or no credit. A secured credit card may be the better choice if the card does not have any
annual fees or interest. Self gives you a secured credit card after you have made three
consecutive on-time payments for your Self Credit Builder account.
Does a Self Credit Builder account require a credit check?
Self does not run any credit checks when assessing your application for a credit builder
account. Your score will not go down if you submit an application for a Self Credit Builder
account.
How much money do I need to take out a credit builder loan?
The minimum security deposit varies for each lender. While you can get a credit builder loan
with as low as $50 in some cases, you usually need $500 to $1,000 to make a security deposit
for a credit builder loan.
Do credit builder loans work?
Credit builder loans strengthen your payment history, which makes up 35% of your credit score.
These financial products work, but it can take several weeks to see the results. Furthermore,
you will experience a more meaningful credit boost if you make higher monthly payments
toward a credit builder loan.
The bottom line
The Self Credit Builder account is a useful resource for anyone who is seeking to improve their credit score. A higher credit score will save you a lot of money in the long run. Getting a lower mortgage rate can reduce your total interest payments by thousands of dollars. You’ll also get a better deal for your auto loan.
A high FICO score also helps in other areas, such as increasing the likelihood of getting your tenant application approved and securing lower monthly utility bills. You don’t need an 850 FICO score to get these perks. Most mortgage lenders require that you have a 620 FICO score or higher, and getting your score above 700 will give you plenty of leverage in negotiations.
It’s difficult to rebuild your score with traditional financial products like unsecured credit cards. Those types of credit cards and loans have high credit score requirements and require hard credit checks. Self can get you on the path to a good credit score. However, consumers with good credit don’t benefit as much from credit loans.
The best scenario is to pay your credit card balance in full at the end of each month. Self can help you reach that ideal state by making unsecured credit cards more accessible.
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Writer
Marc Guberti is a business freelance writer who specializes in personal finance, digital marketing, and entrepreneurship. His award-winning book "Content Marketing Secrets" teaches readers how to create, promote and optimize content for growth and revenue. Marc also hosts the "Breakthrough Success Podcast," where listeners learn how to master content marketing and get more clients.
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