A credit builder loan is a secured installment loan that is designed to help you demonstrate your creditworthiness while accumulating savings for a rainy day. When you make regular payments on your credit builder loan, the lender reports your positive credit history to the credit bureaus, which is a key ingredient for boosting your credit score. One thing to know about credit builder loans is that, unlike other loans, they provide access to the money upon fully paying the loan. In other words, at the end of the loan period you will receive your money and the benefit of having all credit bureaus notified of your positive credit history.
You pick a Build Credit Builder loan that works for you, apply, and get approved. Then your account is established and you will have a Build Credit Builder loan. As you make monthly payments on that loan, that activity is reported to the credit bureaus at the beginning of each month, which adds to your positive credit history. Keeping up with payments on your Build Credit Builder loan is important because it shows your ability to make timely payments on a credit account. The most commonly used credit scores, such as FICO and VantageScore consider this timely repayment history as the biggest determinant of your credit score. When you finish making your payments, you receive your money and your credit score will reflect your positive credit history.
This varies based on your individual circumstances. The lender will report your positive payment history to the credit bureaus each month, however the time it takes to affect your credit score varies based on other factors like your history with credit, other outstanding debt, and your payment history. We have seen through the Consumer Finance Protection Bureau’s 1 study of credit builder loans that credit scores of those without existing debt can increase by an average of 60 points 1 over the course of 6 to 24 months.
Yes. We charge a one-time, non-refundable account opening fee of $9.
No. We do not check your credit score when you apply for a Build Credit Builder Loan.
To maximize the impact on your credit score, your payment history on your Build Credit Builder Loan will be reported to all three credit bureaus: Equifax, Experian, and Transunion.
Although similar in concept, Build’s Credit Builder Loan is an installment loan, not a revolving credit product. Secured credit cards are credit cards that typically require an upfront deposit. Nerd wallet has a great explanation on secured credit cards here.
Yes. You can pay off your Build Credit Builder Loan early and close it at any time, but keep in mind that it could reduce the benefit you experience to your credit score. Your payment history is the single most important factor in determining your credit score, and paying off your loan early shortens your payment history.
This is an exciting moment. When you have finished making payments on your Build Credit Builder Loan, the lender will report the loan as paid in-full and return your accumulated savings less interest and fees.
Secured credit cards are different from other credit cards in that they are backed by a security deposit. A cardholder must deposit the money upfront, and they are usually only granted a credit limit that is less than or equal to the security deposit.
The Build Secured Credit Card uses money you’ve already put away from your Build Credit Builder Account in order to fund the security deposit needed for the Build Secured Credit Card. No additional deposit is required. As you accumulate savings by making further payments into your Build Credit Builder Account, you can request an increase to your credit limit on the Build Secured Credit Card.
Become eligible for the Build Secured Credit Card after as little as three months and with as little as $110 in accumulated savings from your Build Credit Builder Loan. Check out the Secured Card area of the dashboard to learn more.
Opening a Build Secured Credit Card does two things for you: 1) it offers you a way to access your accumulated savings from your Build Credit Builder Account prior to its completion; and 2) it adds another “trade line” to your credit report, which can help your build your credit as you make on-time payments on balances held on the Build Secured Credit Card.
The Build Secured Credit Card is accepted anywhere Mastercard is accepted. Use the card or card number as you would your other debit or credit card. You can also upload it to your mobile wallet.
No. Build does not perform a hard or soft credit pull to determine your eligibility for the Build Secured Credit Card. Applying for a Build Secured Credit Card will not impact your credit score but, once your account is open and active, be sure to make on-time payments to avoid any negative account history from being reported to the major credit bureaus.