Editor’s Note: Overdraft Apps provides detailed product reviews and recommendations based upon extensive research and our own hands-on testing. We may earn a referral fee when you sign up for or purchase products mentioned in this article.
Bad credit is an expensive hole that can sometimes seem impossible to climb out of. It can seem cruel and ironic that people who most need to borrow money are the least able to do so. Plus, the sky-high interest and fees on the few credit cards or loans that you can qualify for often leave your finances in even worse shape.
There are no magic bullets for establishing or improving your credit history, but a credit builder plan from Self Financial is an affordable tool that could help meaningfully build your credit score, while helping you build up some savings too. We explain how it works, what results you could achieve and how much it really costs in our Self Financial review.
Your credit score is a powerful number
Earn a high credit score through years of responsible borrowing and timely repayments, and you’ll often find your mailbox stuffed with credit card offers touting large credit lines, low interest and fees (sometimes 0%!) and rich reward programs, like significant cash back or buckets full of frequent flier miles. A high credit score is a ticket to a low-rate mortgage, an affordable car loan and the confidence that your application for financing will almost surely be quickly approved, often with the best available terms.
However, if you have a low credit score because of some financial mistakes, tough times or you haven’t yet established much credit history, accessing credit is often challenging, stressful and extremely expensive. You usually can’t borrow as much as you’d like to and are trapped paying costly fees and sky-high rates that just put more strain on your finances.
Plus, a low credit score can have significant hidden impacts on your life, including preventing you from renting an apartment, costing you more for insurance and even disqualifying you from getting hired for some jobs!
Building or restoring your credit history takes time and consistency. Other than paying off most of your outstanding debt overnight, which unfortunately isn’t a realistic option for most, there aren’t solutions to dramatically boost your score overnight (and you should be wary of any products that claim that they can do so.)
However, there is a proven and affordable product that can help you build your credit and your savings at the same time – Self.
What is Self Financial?
Self Financial partners with banks to offer credit builder loans – loans with small, fixed monthly payments that are specifically designed to help boost your credit score by documenting your ability to make regular, on-time payments. You can create an account online or via the Self Financial app in less than five minutes, and a low credit score or no credit file are no problem. Applying for a Self account won’t hurt your credit score.
When you open a Credit Builder Account1 with Self, you commit to making a regular monthly payment between $25 – $150 for 12 – 24 months. These funds are yours, so you’re building up some savings alongside improving your credit score.
Unlike a traditional personal loan, which will provide you with your loan proceeds before you start making payments, with a credit builder loan through Self your payments sit in your account and are returned to you upon completion of your plan, minus a reasonable interest rate and administrative fee. Several Self plans charge less than $100 in total fees and interest cost.
Along the way, Self reports your monthly payments to the three major credit bureaus (Equifax, Experian and Transunion) each month. Your credit score is based on several factors and the largest component is your payment history. So, making on-time payments on your Self Credit Builder Account can help boost your score, sometimes significantly. Self makes it easy to set up automated monthly payments at no charge, so you never need to worry about missing a due date.
Adding a Self Financial Credit Builder Account to your credit profile may also boost your score by adding an installment payment to the types of credit products that you have. Credit bureaus view having multiple types of credit and loans favorably, though this is a smaller factor in your credit score than payment history.
Self makes it easy to track your credit score on all three credit bureaus, so you can see your progress. Plus, there’s no ‘hard pull’ when you apply, so your score won’t receive another ding.
You can also qualify for a Self Visa credit card in as little as three months, with a credit line that grow to up to $3,000!
Build your credit score and build your savings >>> Check out Self
How much can Self Financial improve your credit score?
Self customers see their credit score increase by an average of 32 points2! Individual results vary, of course. People with low credit scores tended to see the biggest improvements!
The payoff from a higher credit score can be substantial, with the ability to borrow more, pay lower interest rates and fees, and tap rich credit card rewards programs.
If you don’t have a credit history, Self can help you establish one in just six months. You’ll have a credit score – potentially in the fair-to-good range – with all three major credit bureaus just by making small, on-time payments on your Credit Builder Account.
Self features testimonials from customers who went from no credit score to 600+ in less than one year. 600 is a key credit score threshold, as it is the minimum score that many lenders require for personal loans, unsecured credit cards and in-store financing offers.
Self’s Credit Builder Account can be a low cost and effective tool for establishing or re-establishing good credit, especially if you:
- Are a young person who does not have a credit history
- Have a low credit score due to problems repaying credit cards and loans
- Are trying to re-establish your credit after bankruptcy
If you already have a great credit score a Credit Builder like Self usually won’t be able to add many points to your score and could actually lower your score temporarily in some circumstances. Missing your monthly payments could damage your score as well, though you can cancel your Self account at any time and receive back the payments you’ve made, less interest and fees.
Start improving your credit score >>> Check out Self
How much does Self cost?
Self’s Credit Builder Account is quite affordable and helps you build savings along the way, which are returned to you at the end of the 12 or 24 month term that you selected, less interest and a $9 one-time admin fee. The total cost of all Self plans is between 15.61% – 15.97% Annual Percentage Rate (APR), which is less than half of what many personal loans cost for borrowers with a blemished credit history.
You can choose the monthly payment amount and plan length that works best for you, ranging from $25 – $150 per month. Larger monthly payments will help you build up more savings. Here are Self’s four plan options:
|Self Plans:||$25/month for 24 months||$35/month for 24 months||$48/month for 12 months||$150/month for 12 months|
|You’ll Get Back||$520||$724||$539||$1,663|
For example, if you choose the Self Credit Builder Account with a $48 monthly payment for 12 months, you’ll make $576 in total payments and receive back $539 upon completion of your plan. Self’s interest cost and upfront admin fee will total $46, which is a 15.65% APR.
If you need to access your funds early or are having trouble keeping up with payments, you can easily cancel your Self account at any time, for any reason. Your funds will be returned to you, minus interest and fees.
Pick your own affordable Credit Builder Account >>> Check out Self
Qualifying for the Self Visa® Credit Card
Self’s Credit Builder Account is a great tool for improving your credit score, but since you don’t get paid back until the end of your plan, it doesn’t provide much help if you’ve got a cash crunch today.
The great news is that after you’ve made just three consecutive on-time monthly payments on your Credit Builder Account and have at least $100 built up in savings in your Self account (and your account is in good standing), you’re eligible for the Self Visa credit card! All Self customers who meet these criteria are automatically approved, so you won’t be declined and you won’t ding your credit score with a hard credit pull.
The Self Visa® Credit Card is a secured credit card, meaning that you’ll need to post a deposit to establish your credit limit. However, you can use your accumulated savings in your Self account to fund your credit card. You don’t need to pay any additional money to get started.
Secured credit cards like the Self Visa® Credit Card are a great, low-cost way to put a ‘real’ credit card into your wallet. Don’t confuse it with prepaid debit cards, which only let you spend the amount that you’ve paid and don’t offer any unsecured credit or report to credit bureaus.
As you make on-time monthly payments on your Self Visa® Credit Card, your credit line can increase over time and you can qualify for unsecured credit, meaning that you can spend more than the amount of your deposit. Plus, activity on your Self card is also reported to the three major credit bureaus, so your on-time payments can help your credit score climb even higher! The Self Visa® Credit Card carries a modest annual fee of $25 and as a nice perk, Self waives the late fee the first time you miss a payment due date (late fees cost up to $25 after that).
Start building your credit score >>> Check out Self
Is Self legit?
Self has helped over 1 million people build their credit and savings since the company was founded in 2015. The company is backed by prominent venture capital firms, including Altos Ventures, Silverton Partners and Meritech.
Self Financial is rated 4 out of 5 by the Better Business Bureau, with nearly 600 reviews. Most one star reviews relate to customer services complaints or frustration around Self’s fees being deducted after plans have been completed or canceled. (Self clearly discloses its fees throughout its website and app and within the application process.)
When you open an account with Self, your funds are held by one of three banks (Lead Bank, Sunrise Banks, N.A. or SouthState Bank, N.A.) each of which is a member of the FDIC, meaning that deposits are federally insured. Your money is safe and secure.
Self is available in all 50 states. You can open and manage an account entirely online or via the Self mobile app.
Build your credit score and build your savings >>> Check out Self
Watch: How Self Credit Builder Accounts Work
- Current Card – No Fee Overdrafts up to $200 with Overdrive - October 1, 2022
- How to Overdraft up to $200 with Chime SpotMe - September 20, 2022
- Chime Credit Builder Card Review – No Credit Check + up to $200 Overdrafts - September 20, 2022
- All Credit Builder Accounts made by Lead Bank, Member FDIC, Equal Housing Lender, Sunrise Banks, N.A. Member FDIC, Equal Housing Lender or SouthState 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 consumer report review and approval. All Certificates of Deposit (CD) are deposited in Lead Bank, Member FDIC, Sunrise Banks, N.A., Member FDIC or SouthState Bank, N.A., Member FDIC.
- Individual results may vary. Average credit score change using VantageScore 3.0 based on a sample of 40,403 Self customers who started their accounts in 2017 or 2018 and completed the full term of their Credit Builder Accounts in 2019. Sample excludes customers who started with no credit history. Results show that customers with a starting credit score of 600 or below were more likely to see positive score change results.