Top Credit Building Apps Of 2022 – Bankrate.com

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As soon as you start looking for an apartment, take out a loan or apply for a credit card, you learn how important having a good credit score is. Having a good credit score, which starts at 670 on the FICO scale, is the only way to get the best terms on your loans. Good credit generally means lower interest rates, which allows you to pay less over the life of your loans than someone with poor credit.
If you don’t yet have a good credit score, there are many ways you can start building it. One of those ways is using a credit builder app. These apps help you track your score, take out loans to build your score, and provide the education you need to build and maintain good credit.

Credit building apps, as their name suggests, work in various ways to help you improve your credit score. You’ll generally find three types of apps:

Who this is best for: those with little or no borrowing history
SeedFi falls in the lender category, offering a Credit Builder Prime account that lets you take out a small interest-free loan as small as $10. When you get paid next, you pay SeedFi back and this positive payment gets reported to the credit bureaus. The service is free, which is a huge plus.
SeedFi also offers another interesting loan option for people who need a small, relatively short-term loan. The Borrow & Grow loans give you immediate access to the cash you need upon approval. Your loan will also include a sum that will go into a savings account. Once you’ve paid off the loan, you’ll get access to the savings account you’ve been paying into, ideally setting you up with an emergency fund so you don’t have to take out a loan next time. With interest rates between 12.96 percent and 29.99 percent, this won’t necessarily be your cheapest option for a loan, so consider a different loan lender or even a credit card for bad credit.
Who this is best for: those with a history of rent and utility payments
Experian, one of the three major credit bureaus, offers the easiest possible way to boost your score. Experian Boost reports payments that typically aren’t included in your credit score, like rent, utilities, and subscriptions. All you do to potentially receive this boost is sign-up and connect your account(s) where you pay your bills or rent. You can choose the positive payments you want to be reported, and you’ll see your results instantly.
While Experian Boost is not a replacement for responsible credit use, many users see a small bump in their score. This won’t fix poor credit, but since it’s free, it can’t hurt to give this credit boost app a shot.
Who this is best for: those who want a small, low-maintenance monthly payment
Kikoff’s main product, Kikoff Credit Account, is a revolving line of credit that you can draw from like a credit card. You’ll get a credit line of up to $750 that you can borrow from to make purchases from the Kikoff store. Then, you can make online monthly payments and you can start to see your credit slowly tick up. When you sign up, there’s no credit check and you’ll be approved instantly.
The account costs $5/month to keep open, but the good news is that the $5 is part of your credit line, meaning you will build credit, even if you don’t borrow anything on top of that $5 monthly fee. You also won’t pay any interest or late fees, making it easy to focus on paying down your small purchases. On average, Kickoff reports that their users raise their scores by 58 points.
Who this is best for: those who want Credit Builder Loans
Self offers a Credit Builder Loan, meaning you’ll pay down the small loan and once you’ve made all your payments, you get access to the money. While you’re making these payments, self holds your money in a CD.
You can choose $25, $35, $48 and $150 for your monthly payment, depending on your budget and how much you want to have available to you once you pay off the loan.
One major downside is that Self isn’t going to be your cheapest option, charging an admin fee of $9 and interest rates in the double digits. SeedFi’s Credit Builder Prime account offers essentially the same service without interest or fees, so there’s really no reason to choose this service over SeedFi.

Credit builder apps are great ways to build your credit, but they’re far from the only options. In addition to these apps, consider building your credit in other ways by:

No one thing builds credit the quickest. A good credit score is a culmination of consistent, responsible financial habits. So make sure you’re paying bills on time, avoiding unnecessary debt, and using your credit cards responsibly.

Credit builder apps that offer short-term loans and alternative data reporting can certainly improve your credit score. How well a credit building app will work for you depends on many factors including your current score, why you have a low score, the app you choose to work with, and the program you choose.

Yes, the apps on this list are all offered by legitimate companies. As with any financial decision, be sure to read the fine print and understand everything about the service before signing anything. If you’re taking out a credit builder loan, ensure you can pay it off fully in the agreed-upon time frame.

You can build your credit instantly with apps like Experian Boost. But to see a substantial difference in your score, you’ll need to actively be paying down debts and take on other methods of credit building for several months.

Bills that typically affect your score include personal loans, mortgages, credit card accounts, car loans, and other forms of revolving credit. Your utilities and rent payments unfortunately aren’t usually factored into your score automatically (unless you fail to make payments on time). Services like Experian Boost add rent and utility payments to your credit report.

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