Let me guess Dream Catcher… you want to improve your credit, right?
Nope, I’m not psychic; easy guess because credit is the #1 request for help in my inbox.
Everyone wants better credit, and even folks with great credit, want great-er credit. Lol!
The big fuss? Bad credit makes for a very expensive life; you end up paying way more for the things you want/need than folks who have solid credit in their corner.
Examples: Some companies require security deposits for low credit... interest rates (on cars, homes, credit cards, etc.) are higher... and some jobs won’t even hire you if your score is below a certain number. Yup!
I know all about that bad-credit life because when I was in my twenties, my credit was rocking out in the 800s… and then the 2009 recession hit. I lost my job, home, and savings and my credit score dropped to the 500s. Yikes!
One of the many ways I tried to build my credit back up -in hopes of a better credit score- was to charge things to my credit card and then (hopefully) pay the charged amount off at the end of every month to show our peeps at FICO that I was learning how to use credit responsibly.
The problem with that method is that it takes for-ev-er… and you have to purposely spend money every month as part of your strategy to better credit. No Bueno!
But that was really the only option I knew of… until I met “Self”!!
What is Self?
Self (previously known as Self Lender) is an awesome, easy-to-use tool that helps you turn money that you are saving… into a double-whammy credit builder!
It’s literally taking a loan from yourself to build credit…. SELF (get it?) 🙂
Here’s the breakdown of how Self’s two power credit tools -a credit builder account + a bonus secured credit card- work:
Self Credit Builder Account (Credit Tool #1)
- Apply for a no-credit-check Credit Builder Account (available nationwide)
- Choose your savings payment plan. You can build credit while saving money starting at $25* per month (and the principal is yours!)
- Make your payments on-time as you pay off your Credit Builder Account. Each on-time monthly payment builds credit history and savings. (And your payments are reported to all 3 credit bureaus!)
- Unlock your savings at the end, minus interest and fees.
Bonus: You’ll get your credit score at no cost!
Here’s a video I did on Self’s Credit Builder Account back in 2018 (back then it was called Self Lender, but the info is still relevant)!
Note 1: They are going to ask you for your SSN. That’s normal procedure when you apply for any loan. The site is secure and has full banking protections.
Note 2: Self DOES NOT use your credit score to qualify you. They are checking to make sure you are 18+ and have an SSN.
Note 3: Anytime you apply for credit, you get an inquiry. Thankfully, Self is NOT a hard credit pull. Hard pulls stay on your credit report for 2 years. Self is a soft pull, so there is no inquiry reported. They don't use your credit score to qualify you. That's why it's not affected. (see note 2)
Note 4: To be on the safe side. DO NOT apply for credit (anywhere), if you plan on buying a house in the next 6-months. Your realtor will thank me. 🙂
Note 5: Take out a credit builder loan. I suggest you take one out for the lowest amount possible so your monthly payments will be manageable. Self’s plans start at $25 per month.*
Bonus Again: Unlike a traditional loan, this one is held for you in a one-year or two-year secured account.
Set up auto-pay! Every month, your super-low payment is automatically taken from your bank account to pay toward the loan — and the fee Self charges to cover its own costs.
5. At the end of the term, the CD will mature and unlock, and its 0.10% APY growth rate means you’ll GET YOUR PRINCIPAL BACK, plus a little interest (minus fees).
Sidebar: You can pay off the loan earlier if you like too. You can pay it off anytime within the year. When you do, you'll get the principal from the CD back.
Basically, it's a loan, but YOU DO NOT get the money. Instead, Self puts it away for you in a CD.
You pay the loan off in a year or two, then you get the money minus interest and fees from the CD back
It's like taking a loan from yourself while saving money at the same darn time! The purpose is to show creditors you can pay back and off what you owe. Self is genius, right?!
The Real MVP Bonus: Your credit history will benefit from responsibly paying on and eventually off, an installment loan with fixed payments. Doing so shows future creditors that you, my friend, are worthy of credit because you proved it 12- 24 months in a row. Woot Woot!
Bonus on Bonus: Although I’m not a fan of the whole “good debt” term, installment loans are looked at similar to student loans. This means, if you’re going to have debt, it’s the better option. Your Self credit builder loan will also increase your “types of debt”, which can positively affect 10% of your credit score.
A Sample Breakdown (courtesy of the Penny Hoarder)
Let’s say you take out a $539 credit builder loan…
Your monthly payments will be $48. By the end of the year, you will have paid off the $539 loan; $576 when you include the interest you will have paid. There is also a minimal $9 admin fee, that Self charges.
That means you’ll have built your credit and improved your credit history for the low-cost of about $46, in one year! The $46 is the full cost of your interest and fees if you get the $539 credit builder loan.
The $46 interest (if you choose to borrow $539), is split into 12 payments and taken as part of your monthly payment (about $6/month), like most interest and principal payments for a loan. That's less than what some banks charge you for your check account each month, and those accounts DO NOT grow your credit.
The math on a $539 Self Credit Builder Loan:
$576 (what you’ll have paid by the end of the 12 months)
+ $9 (Self admin fee)
– $539 (what you’ll get back after paying off the loan)
= $46 (cost of the whole process)
Do you know how much credit repair companies charge? I assure you, much more than $46 for 1-year. Most cost more than $75/month.
**You don't have to just borrow $539. You have other options that are longer-term, but the payments are as low as $25/monthly. Check www.self.inc/pricing for more details.
Self Secured Visa Credit Card (Credit Tool #2):
Moving on to the second way that Self helps you get your credit together –– the Self Visa Credit Card (brand-new option)!
A secured credit card is a great, next-step in building credit for someone who has had financial challenges.
The Self Visa Credit Card allows anyone who has an existing Self Credit Builder Account to choose a portion of saved money ($100 or more) to use as the refundable security deposit for their credit card. The Self Visa Credit Card has a 23.99% APR (This APR will vary with the market based on the Prime Rate.)
- Open your Self Credit Builder Account.
- Make at least 3 monthly payments on time.
- Have $100 or more savings progress in your account.
- Have no outstanding fees.
- Choose your credit limit and get your Self Visa Credit Card.
- Because the card is connected to the Self Credit Builder Account, you are ALREADY APPROVED (no credit check required).
The Self Visa Credit Card has some major perks and benefits:
Check-in on your credit usage
You won't get carried away with this one! The Self dashboard has a credit utilization meter in the mobile app dashboard to keep you on track with how much of your credit you’re using. (Tip: It's best to stay under 30%)
You have the power to build your deposit
The Self Visa Credit Card uses the money that is already in your Self Credit Builder account to fund your credit line, unlike other secured credit cards, which typically require you to put a security deposit of $200 or more upfront before you can use them. If you open a Self Credit Builder account, you can take up the monthly contribution that fits for you and build up your security deposit over a period of several months instead of having to make hundreds of dollars in one lump sum.
Choose your credit limit
You pick the credit limit for your card based on the amount that you deposited in your credit manager account. For example, if you have paid your Self Credit Manager Account $500 in principal, you can reach a credit limit of up to $500 without putting up any additional money. This might also help you manage your credit utilization, as you can set a credit limit that makes sense based on your spending habits, not how much money you can afford to tie up in a security deposit.
No additional money upfront
Your Credit Builder Account savings progress secures your card and sets your limit. The Self Visa Credit Card, unlike many cards, does not penalize you with a higher APR, as you are struggling to pay on time. The first time you make a late payment the card also charges no late fee. And if you slip up again, the late fee for the card is $15-less than half of the $40 annual late fee paid by many other cards.
Bonus Plus: Self reports to all three credit bureaus: Equifax, Experian, and Transunion. *insert happy-dance*
And, if you utilize both of Self’s power credit tool features… it’s like a double boost to your score over time because you will have two positive credit lines reporting at the same darn time (your credit builder account AND your secured credit card account).
I LOVE happy credit endings!!
Are you getting my drift on how easy it can be to have some credit SELF- confidence? Download Self here and let’s go!
My Lisa Rule: I have 4 sisters and Lisa is the baby (well she’s not a baby anymore). Of all of my sisters, I’m the most protective of her. Before I share any product or service with you, it must pass my Lisa Rule.
What’s the Lisa Rule? If I would not advise Lisa to use a product or service, I won’t advise you to. YOU are my Lisa. I feel protective of you and your financial journey.
Self passes my Lisa Rule. Yes, I am an affiliate of Self, and I earn a commission off of referrals, but I would not recommend a product or service that I didn’t believe was helpful and useful. As a matter of fact, I'm having both Lisa and one of my besties sign-up for this awesome tool this week.
* Sample product: $25 month payment, 24 month term with a $9 admin fee at a 14.92% Annual Percentage Rate. Sample product: $48 month payment, 12 month term with a $15 admin fee at a 15.65% Annual Percentage Rate. Please refer to www.self.inc/pricing for the most recent pricing options.
**All Credit Builder Accounts made by Lead Bank, Member FDIC, Equal Housing Lender, Sunrise Banks, N.A. Member FDIC, Equal Housing Lender or Atlantic Capital Bank, N.A. Member FDIC, Equal Housing Lender. Subject to ID Verification. Individual borrowers must be a U.S. Citizen or permanent resident and at least 18 years old. Valid bank account and Social Security Number are required. All loans are subject to ID verification and consumer report review and approval. Results are not guaranteed. Improvement in your credit score is dependent on your specific situation and financial behavior. Failure to make monthly minimum payments by the payment due date each month may result in delinquent payment reporting to credit bureaus which may negatively impact your credit score. This product will not remove negative credit history from your credit report. All loans subject to approval. All Certificates of Deposit (CD) are deposited in Lead Banks, Member FDIC, Sunrise Banks, N.A., Member FDIC or Atlantic Capital Bank, N.A., Member FDIC.