Credit can be a blessing as well as a curse for many people, and even the most financially careful consumers can find themselves facing credit damage that impacts their life significantly. When credit damage happens and your credit score drops, the most common thing to do is to try to repair your credit yourself, which is where Self comes in. They are a lender that offers several different ways for the average consumer to repair their credit while offering strong financial tools at the same time.
While Self does have some robust credit building and credit repair products and services, they won't have value for every consumer. They will help you build a better credit history, but they will still require some work on your end to make payments on time while coping with the interest and fees.
There's a lot to consider before using Self, and when you look at what they offer in the context of your personal financial and credit needs, you may find that they are a good fit for you, or you may find the opposite. There are some significant benefits to using their service, as well as some considerable drawbacks as well. We'll look closely at Self lenders and see if they will work for you in 2022.
Self Credit Builder Review
Self's Credit Builder Account is the primary financial product that they offer. The focus of the Credit Builder Account is to help consumers raise their credit scores and rebuild a favorable credit history by offering an installment loan. Self doesn't provide the funds directly. Instead, they work with countless partner banks, where they will open a Certificate of Deposit account. This account will technically belong to the consumer using the Self Credit Builder Account service, but the funds aren't released to the customer until the loan is paid off. For those that can stick to the payment requirements and afford any additional fees that may go along with their payments, the Self Credit Builder Account is a great option.
Since Self will run an initial credit check on the user when they apply to open a Credit Builder Account, if that user decides, later on, to apply for the Self Visa Credit Card, there will be no additional credit check, preventing additional credit impact from the hard credit pull. This may be one of the biggest benefits of the Self-service since users will be able to obtain two credit-building financial tools with only one credit check. These two financial tools will also be of different types, one being an installment loan and one being a revolving line of credit, which means the user's credit will improve more than simply opening two secured credit cards or opening a single installment loan.
Is Self Credit Builder Legit
Self is a completely legitimate and honest company that is not only based in the US, in Texas but is able to FDIC-insure all of its accounts. They have partnered with many brick-and-mortar banks in order to provide the necessary insurance and to help with their account management. This includes not only the savings accounts that they offer but the credit builder loans and other products that they provide.
Self will even provide users with official bank statements from the partner banks to provide assurance to their customers that their funds are safe and properly managed. The products they offer are legit and useful to those who are in need of their credit-building services. If you find that you fit the general profile of their customer base and can make your monthly payments on time, every time, you will be able to reap the value that Self offers. That said, there are some drawbacks to their service, which means they aren't right for everyone.
How Does Self Work
Self offers two financial products for their customers. They offer a Self Credit Builder Account and a Self Visa Credit Card. The Self Credit Builder Account functions as an installment loan that is paid to the user following completion of the agreed term, while the Self Visa Credit Card is a secured credit card that can be obtained by Credit Builder Account users once they have enough payment history and value in their Credit Builder Account.
In order to open a Credit Builder Account, the user will need to submit an application through the Self desktop site or their mobile site. This application will allow Self to work with a partner bank to open a CD account for the user with the terms they choose ahead of time. There are four options for the Credit Builder Account, two 24-month options and two 12-month options, and both will eventually allow the user to get the Self Visa Credit Card later on.
Once the user has opened their Credit Builder Account account and has made three on-time payments to that account, totaling at least $100, and provided their account is in good standing, they will be allowed to apply for the Self Visa Credit Card. The card is a secured credit card, which means it will be secured by the same funds that you've previously paid to the Credit Builder Account installment loan. It also means that the initial credit limit will likely be $100 if the card is applied for right as the conditions for issuance are met.
Since your payment history can account for up to 35% of your credit score, and the types of credit accounts can also have a significant impact, Self has the potential to help your credit a considerable amount. When opening a Credit Builder Account, Self will not do a hard credit pull, which will help the user obtain their products without a significant initial impact on their credit. Additionally, once they have a Credit Builder Account, the Visa Credit Card from Self can be obtained without any credit check at all. Provided the user makes their payments on time and doesn't overextend themselves, they will likely see significant credit improvement by using Self.
Self Credit Builder Loan
One of the big draws to Self is that there is no formal application needed to join Self, but in order to open a Credit Builder Account, you will need a separate application. This application will include options for the four different Self options. The options are:
- $25 per month for 24 months, leading to a $520 payout at the end of the term.
- $35 per month for 24 months, leading to a $724 payout at the end of the term.
- $48 per month for 12 months, leading to a $539 payout at the end of the term.
- $150 per month for 12 months, leading to a $1,663 payout at the end of the term.
If you are approved for your Credit Builder Account, there will be an automatic charge of $9 to cover administrative fees. At the time of approval, the Self partner lender will place the loan funds into a CD account, and the following month the payment schedule will begin. All of the payments needed for the Credit Builder Account will be the same each month of the term. If a payment is late, however, there is a 15-day grace period after which a late fee of 5% of the payment is applied and due with the late payment.
As you continue to pay on the loan, the payments will be reported to the three main credit reporting bureaus. As soon as the final payment is made, the loan funds will be unlocked and shortly after will be disbursed to you. This will be less any remaining fees and interest payments. Self will remit the funds to you either by paper check or with an ACH transfer to an account of your choosing. Then the loan will be reported as paid off as agreed and will make your credit look much better than simply holding a secured credit card and using it periodically.
If you are interested in the Self Credit Builder Account, it's available to consumers in all 50 states, and as long as you're 18 or older, you can apply either online through the desktop site or through their mobile platform. The only other conditions are that you'll need to be a citizen or otherwise legally residing in the US, have a social security number, and have a current bank account or prepaid debit card. If you set up your payments to come from your bank account or prepaid account, the payments will be fee-free. If you pay with a debit card, however, there will be a fee of $0.30 + 2.99% applied to each payment.
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Understanding The Services & Products Of Self Will Help You Determine If They Are For You
If you have some previous credit damage but are able to make relatively affordable monthly payments, Self may be a great option for you. Just be studious in your payments, wise with your credit usage, and remember that even once you have the loan and the card, improvements to your credit report and score may still take months to materialize.
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Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.