Self App Review: Is the Credit Builder Account Worth It?
Trying to make the most of self app review credit? You are in the right place. Below we break it down in plain English, with practical tips you can actually use.
Key Takeaways
- Share Some links on our website are sponsored, and we may earn money when you make a purchase or sign-up after clicking.
- Learn more about how we make money and read our review methodology.
- Self, formally known as Self Lender, offers products that help people establish credit or build their credit.
Self, formally known as Self Lender, offers products that help people establish credit or build their credit. In this Self review, we’ll take an in-depth look at their products, explain when using these products makes sense, and outline their potential impact on your credit.
4/5Self offers four types of credit building loans (called a Credit Builder Account), as well as a secured credit card that can transition into an unsecured card over time. The cost of Self’s Credit Builder Accounts range from $25 to $150 per month, for 24 months. At the end of the term, you get back the money you paid (minus interest and fees). Self’s secured credit card differs from a traditional secured card. A Self Credit Builder Account is required to open a secured card. Overall, Self stands out with its combination of products for those with a fair credit history. Because of its costs, we think there are better alternatives for people looking to establish their credit for the first time.
Pros:- Reports to all three major credit bureaus.
- Credit history is not required to open an account.
- Allows you to transition from a secured card to an unsecured card, which keeps your credit history intact.
- Self’s Credit Builder Accounts have a high interest rate.
- The $25 minimum plan is more expensive than competitors.
- Taking out a loan or a new credit card can have a short-term negative impact on your score.
Table of Contents
ToggleWhat Is Self?
Self is a financial technology company with the stated mission of helping people “build credit and savings and reach [their] financial goals.”
Self’s two offerings consist of:
- Credit Builder Accounts (loans).
- A secured credit card that can transition to a traditional (unsecured) credit card.
Self Credit Builder Account
With a Self Credit Builder Account, you’re essentially taking out a loan that you pay back over time in the form of monthly payments. This loan (along with every on-time loan payment you make) gets reported to the three major credit bureaus, potentially helping you build your credit.
The key difference between a traditional loan and a Self Credit Builder Account is that instead of getting a lump sum of money upfront, you get back all the money you paid (minus fees and interest) at the end of 24 months.
Self has four Credit Builder Account plans available:
Small BuilderMedium BuilderLarge BuilderX-Large BuilderMonthly payment:$25$35$48$150Term length:24 Months24 Months24 Months24 MonthsTotal amount paid:$600$840$1,152$3,600Amount returned:$511$717$985$3,039Total cost:$89$123$167$531Please add the following pricing disclaimers for the Credit Builder Account: $25/mo, 24 mos, 15.92% APR; $35/mo, 24 mos, 15.69% APR; $48/mo, 24 mos, 15.51% APR; $150/mo, 24 mos, 15.82% APR. See self.inc/pricingA Self Credit Builder Account is listed on your credit report as an installment line of credit. If you only have revolving credit (such as credit cards), this can help you diversify your credit mix (which is one of the factors that determines your credit score).
Credit mix accounts for just 10% of your credit score calculation, so this won’t move the needle much. At the same time, when paired with the positive effect of the on-time monthly payments being reported, it could help you build credit.
How Does the Self Credit Builder Account Work?Where a Credit Builder Account will have the most impact is in your payment history, which is the single biggest factor in your credit score (35% of the calculation).
Self reports your payments to all three major credit bureaus, so as long as you make your payments on time, you’ll build a positive credit history. If you miss a payment, Self will also report that missed payment to the credit bureaus, so there is some risk associated with opening an account.
Opening an account is equivalent to taking out a loan, and you will pay fees and interest. For example, with a Small Builder account you’ll pay Self $600 over the course of two years and get back just $511.
When does the benefit justify this relatively high cost?
Those with a poor payment history on their credit report will benefit most from a standalone Self Credit Builder Account. But if a factor such as credit utilization is holding your credit score back, you won’t see a big lift with just a credit builder loan. In that case, you may see the more benefit from adding the secured Self Visa® Credit Card to your credit portfolio (or by leveraging the other strategies discussed below).
Pro tip: Open an account with Credit Karma to get a free credit report card with customized recommendations for improving your credit score.
Secured Self Visa® Credit Card
If your account is in good standing and you’ve made your last three payments on time, you can apply for the secured Self Visa® Credit Card, which is a secured credit card that you can use to make purchases.
There are a few key differences between this card and traditional secured cards.
- Unlike a traditional secured card (where a deposit is required), the savings in your Self Credit Builder Account acts as the deposit for the secured Self Visa® Credit Card credit card.
- No hard credit check is required to open your secured Self Visa® Credit Card.
- Your credit limit increases as you build your savings balance in your Self Credit Builder Account.
- There is a $25 annual fee.
Similar to a secured card, payments are made out of your own checking account. In other words, your Credit Builder Account isn’t used to pay off your bill , just to secure the balance. That means missing a payment could negatively impact your score, as could carrying too high of a balance.
The benefits to your credit score of having a Self Credit Builder Account and secured Self Visa® Credit Card are:
- Your credit limit increases monthly as you progress on your savings goals with the Self Credit Builder Account. This can help you lower your credit utilization ratio, which is a key factor in your credit score calculation.
- You’re building a positive monthly payment history on a revolving line of credit and an installment line of cre
Final Thoughts
The bottom line: a little research on self app review credit goes a long way. Compare your options, watch for seasonal offers, and never pay full price when a better deal is one click away.
Originally published at thewaystowealth.com.
R.J. Weiss
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