Self offers an innovative tool that lets you build credit while saving money. But maybe you’re wondering how much it’ll raise your credit score and the length of time it’ll take. It depends on several factors.
Read on to learn more about Self and how fast it could build your credit score.
The Credit Pros will help improve your credit score by removing inaccurate credit information from your consumer credit reports.
Check your credit report and FICO credit score, understand, manage, and improve your credit and protect your personal information.
You’re more than just your credit score. With Grain, it’s possible to access a revolving line of credit based solely on your cash flow.
What is Self (formerly Self Lender)?
Self is a financial technology company that offers affordable credit-building tools to consumers. Its Credit Builder Account and Secured Visa Credit Card make it easy to build credit and save money without paying a ton of fees and interest.
Self is available in all 50 states. You don’t need a specific credit score to qualify, and you can get started with a Credit Builder Account for as little as $25 per month (plus a $9 administrative fee).
Payment activity is reported to the three credit bureaus each month to build a positive payment history.
Here’s how it works:
- Step 1: Apply for a Self Credit Builder Account.
- Step 2: If approved, select the credit builder plan that works for your budget.
- Step 3: Self will open a certificate of deposit (CD) to hold the loan proceeds.
- Step 4: Make the agreed-upon monthly payments for the payment term.
- Step 5: Receive your funds (minus interest and fees) when you pay off your Credit Builder Account.
How Much Does Self Raise Your Credit Score?
On average, consumers see a 32-point increase in their credit score from the Self Credit Builder Account. But the change in your credit score may be more or less significant. It depends on your credit profile, credit history, how long you keep the Credit Builder Account open and if you make timely payments.
If you’re new to credit, you could see a higher increase in your credit score than someone with an established credit history. In fact, it’s not uncommon for a credit newbie to go from not having a credit score to a score in the mid-600s in six to nine months because they’re starting from scratch.
While you want to focus on building a solid credit score, it’s equally important to pay attention to what’s in your credit report. The information is used to calculate your credit score, and any errors or omissions could hurt your credit rating.
How Fast Could Self Build Your Credit Score?
It generally takes at least six months to build your credit score from scratch. This is the amount of time FICO needs to calculate your credit score.
You could get a VantageScore from the moment your new Credit Builder Account is reported to the credit bureaus. However, this scoring model isn’t typically used to make lending decisions. FICO is the preferred choice by 90 percent of lenders and creditors, so it’s best to be patient before you start applying for credit.
Rebuilding your credit score is another story. If you make timely payments on your Credit Builder Account, your payment history will improve and start to overshadow the negative marks on your credit report. Still, it could take time to see significant improvements in your score.
But if your primary issue is credit utilization, paying down high balances and making timely payments on your accounts could quickly boost your score. Consider exploring ways to earn more and adjust your budget to free up funds and pay down your revolving debts (i.e. credit cards) faster.
The Credit Pros will help improve your credit score by removing inaccurate credit information from your consumer credit reports.
Check your credit report and FICO credit score, understand, manage, and improve your credit and protect your personal information.
You’re more than just your credit score. With Grain, it’s possible to access a revolving line of credit based solely on your cash flow.
The Advantages of Self vs. Other Ways of Building Credit
Here’s a breakdown of how Self compares to other credit-building products.
Self vs. Secured Cards
You could get a secured credit card and pay the balance off each month to build credit. However, you could have trouble getting approved if you’re new to credit or your credit history is too blemished for the lender to give you a chance.
Furthermore, traditional secured credit cards usually have an opening deposit requirement. The funds are used as collateral to secure the account and are equal to your credit limit. Some cards also have annual and administrative fees that make the cost of being an account holder outweigh the benefits.
But with a Self Credit Builder Account, you’ll have the luxury of having payment activity reported to the credit bureaus monthly, minus the excessive fees and opening deposit. Instead, you’ll only pay an administrative fee of $9 to get started and make monthly payments for a set period. When the repayment term ends, you’ll get back the sum of payments made minus interest. Another key difference is the qualification criteria – there’s no minimum credit score, and Self does not perform hard pulls to your credit.
Even better, you could get the secured Self Visa Credit Card once you’ve had a Credit Builder Account for at least three months, made timely payments and reached at least $100 in savings progress. You won’t need an additional deposit as the funds from your savings progress are used to set the credit limit, and you’ll enjoy the same ability to make purchases offered by traditional secured credit cards.
Self vs. Co-signed Loan
You can use a personal loan to start rebuilding credit. But here’s the catch, you’ll need to convince a relative or friend with good or excellent credit to sign on the dotted line and assume responsibility if you default on the payments. Plus, you’ll have to pay back what you borrow plus interest.
But with a Credit Builder Account, a co-signer isn’t needed. You’ll make monthly payments on your credit builder loan, but the funds (minus any interest) are yours to keep at the end of the repayment period.
Self vs. Prepaid Cards
Prepaid cards operate like debit cards and are used to make everyday purchases. But they aren’t linked to a bank account. Instead, funds are loaded onto the card, and you can swipe away until they’re exhausted. The transaction activity on prepaid cards has no bearing on your credit score as it’s not reported to the credit bureaus.
Sign Up with Self if You Want to Build Credit
Start building credit while saving money with a Credit Builder Account from Self. It only takes a few minutes of your time to get started, and you can choose from one of the following plans:
- Small Builder: Pay $25 per month for 24 months and receive $520 back. The APR is 15.92 percent, and the total cost of the loan is $89.
- Medium Builder: Pay $35 per month for 24 months and receive $724 back. The APR is 15.97 percent, and the total cost of the loan is $125.
- Large Builder: Pay $48 per month for 12 months and receive $539 back. The APR is 15.65 percent, and the total cost of the loan is $46.
- X-Large Builder: Pay $150 per month for 12 months and receive $1,663. The APR is 15.91 percent, and the total cost of the loan is $146.
Take the first step towards meeting your credit goals today by applying for a Credit Builder Account from Self.
