Bad credit or no credit can make it difficult or impossible to get a credit card, auto loan, personal loan or mortgage. Lender requirements are always tightening, so it’s going to be even harder for a person with “so-so” credit to approach a lender and be approved.

Self Credit Builder (formerly Self Lender) does two main things to help with this situation:

  1. Helps you build credit history
  2. Save money

Credit Builder takes the guesswork out of rebuilding your credit with a Self Loan.

What Is a Self Loan?

A Self Loan is an installment loan with one main goal: helping build credit.

The loan is different than a standard loan because you will not receive any of the money upfront. Instead, you’ll be paying into the loan with the money being deposited into a certificate of deposit (CD) account.

How Does A Credit Builder Loan Work?

Credit Builder is a loan that allows you to target the 35% contributor to your FICO score: payment history.

Credit Builder Loan Review

Building a credit score means that you’ll need to have a positive payment history.

If you’re unable to get credit, you won’t be able to add to your credit history to boost your score.

This is where Credit Builder becomes a valuable tool in helping you establish or improve your credit.

The process follows an easy four-step process:

  1. Apply for a loan

You’ll apply for a loan with Self’s bank partners. Since the lender doesn’t want to take on any risk, you will not receive money like you would in a traditional loan. Instead, all of your money is put into a CD.

  1. Pay off the loan

You’ll have to choose what payment terms are ideal for you: 12-month or 24-month. A 24-month loan allows you to pay less into the loan each month and is a good option if you have little disposable income to share.

  1. Continue paying the loan

Throughout your repayment period, you’ll need to continue repaying your loan. Payments and non-payments are recorded, so it’s important that you make payments or risk negatively impacting your credit score.

Payments are reported to all three credit bureaus.

  1. Get the Money You Paid Back

You’re paying into a CD, and at the end of your loan term, you’ll receive your money back. The money you will receive will be what you paid into the account minus fees and interest.

Payments start at $25 a month

The larger your monthly commitment, the more you’ll build your credit. Four main monthly payment options are available:

  • $25
  • $35
  • $48
  • $150

Self Lender Interest rates will apply on the loan and will vary. The current interest rate is 12.44% with an APR of 15.65%. The administration fee is a mere $9 to $15 and is non-refundable.

You do have the option of closing out your account early.

All loans are FDIC insured.

The lender limits their risk by not providing you with actual cash but instead putting all the money you pay into the CD.

It’s a smart way to build credit and enhance your credit score with favorable results.

During the entire repayment period, you’ll have access to free credit monitoring and a VantageScore to track your progress.

You’ll be able to track progress month-by-month to have an insight into how this product is working for you.

How Much Does Self Lender Raise Your Credit Score?

The impact of positive payments will be cumulative, so it will take time to build up your score.

Credit bureaus want to see you make payments over time to know that you’re responsible and trustworthy.

Secured loans, like the one offered through Credit Builder, will take up 30 to 60 days to show up on your credit report.

A positive impact on credit scores takes about three months on average.

Every borrower is different, and you may experience different results when using Credit Builder. A few of the reviews that mention scores and how Self Credit Builder can help are:

  • Score went from 544 to 621 in two months
  • Score went from 473 to 640 (167-point increase) over a year
  • Score went up by 54 points just for opening an account
  • Score went from 525 to 588 in a course of ten months
  • Person went from no credit to almost a 700-credit score in seven months

Results will vary, especially if you have debts that you’re not paying and attempting to repair your credit by making a payment with Credit Builder while also missing payments from other lenders.

The key to this product is that you’re not taking out a larger loan. Remember, your credit will be impacted if you have too much credit open because you may be seen as a risk. Smaller loans, like those offered through Credit Builder, allow you to have a low-risk, high reward option for building your credit.

What Are the Main Benefits of a Credit Builder Account?

Not sure if a Credit Builder account is right for you?

A general rule of thumb is that these instant credit builders are a good choice if you fall into any of the following categories:

  • No credit
  • Bad credit
  • Can make $25 payments monthly

You’ll be saving during the entire repayment period with a lump sum returned to you at the end of the loan.

Self Loan

The key benefits of the account are:

Save Money in a CD

The money you pay each month isn’t going to a lender but into a CD. You’re paying interest, so the money minus interest will go into your account. Once you’ve met the end of your loan term, the CD will be unlocked and you’ll receive the money.

The breakdown of what sum you’ll receive depends on the length of the loan, but the following are available:

  • $520 on a $25/month payment for 24 months
  • $724 on a $35/month payment for 24 months
  • $539 on a $48/month payment for 12 months
  • $1,663 on a $125/month payment for 12 months

So, you’ll end your credit rebuilding with cash that you can use to put a down payment down on a loan or use to pay off additional debt.

Establish Credit

Establishing credit is difficult because lenders do not want to take on the risk of lending to an individual with no credit history. When you use the Self Credit Builder, you’re going to be establishing credit without having to deal with continual loan or credit card denials.

Improve Credit

Improving credit is one of the key reasons consumers turn to Self. When your credit is damaged or needs a boost, the Credit Builder can provide a substantial boost to your credit as seen in past examples.

The credit boost can be 50 to 150 points in some cases.

Build a Repayment Habit

A lot of borrowers forget to make a payment or make late payments, which ends up hurting their credit. When using Credit Builder, you will fall into the habit of making consistent payments or will be penalized with penalties of 5% of the monthly payment.

You’ll learn how to build your credit responsibly using this method.

Long-term Impact and Improvement

One of the continual benefits that you’ll see from other reviews is that people are able to experience a long-term impact on your credit. What others have done, and maybe it’s something that you’ll want to do, is that they’ve improved their credit to the point that they can:

  • Take out a credit card
  • Get an auto loan

When your credit has improved to this point, take out loans that you can afford to repay and continue making consistent payments. Routine payments through traditional avenues will allow you to continue increasing your credit score.

Remember Credit Impacts Your Life in Multiple Ways

Credit Builder

Credit scores may seem like a means to an end when getting an auto or home loan, but your credit score impacts your life in ways that often go overlooked. Landlords will look at your credit score when renting to you.

But you’ll also be on the wrong side of interest rates.

A person with bad credit or even “so-so” credit will pay more in interest than a person with good credit. You’ll pay more for your:

  • Mortgage
  • Car
  • Credit cards

You’re a high-risk borrower when your credit score isn’t great, so you’ll pay the penalty of high-interest rates as a result. It’s a vicious cycle for people when they have bad credit because you’ll always be paying more for your loans than someone with good credit.

Credit Builder helps you get back on track with your credit in many ways. The product is a great boost to your credit and will help you establish a credit history that will continue to grow as long as you’re responsible and make your payments on time each and every month.

Self will report all of your payments or non-payments to Experian, TransUnion and Equifax. If you stand by your commitment to establish or improve your credit by making consistent payments, this is a solid product that works.

The key is to be able to pay at least $25 per month – that’s it.

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