7 Reasons You Might Need a Self Credit Builder Account

Self credit builder account

By Lauren Bringle Jackson

Even though credit can influence so much of our financial lives – buying a home, a car, getting a loan, a credit card, even affording college – not everyone can gain easy access to this essential financial basic. That’s why Self exists, to provide an entry point for anyone who wants to turn their credit around.

We wrote before about people who might not want a Self Credit Builder Account, but here are 7 reasons why you might need one…

...So you can decide for yourself if it’s the right fit for you...

1 - You can’t access (or have been rejected by) traditional financial products

Whether it’s a car loan, a mortgage, or a credit card, you need credit to get credit. But the trick is, you typically can’t get credit unless you already have it, which creates a difficult challenge for many people. This is the major challenge Self can help you overcome.

Whether you have any credit history or bad credit history, you can use a Self Credit Builder Account to build the credit you need to help gain access to the credit you want in the future.

2 - You are new to credit or you don’t have enough credit history

Just like having bad credit, having too little credit creates another problem. For example, you might not have enough information on your credit report to generate a credit score...or for lenders to decide if they can trust you to pay them back.

In this situation, a credit builder loan could help kickstart your credit profile.

3 - You are new to the US and need to build credit history here

Maybe you’re from a country that doesn’t have a credit system or bases how much you can borrow on how much you earn. Or maybe you had credit in your home country, but it doesn’t translate to the US.

Here, credit is pivotal for gaining access to many financial products. So unless you’re ready to pay cash for everything up front, you need credit ... which Self can help you start building.

The one caveat? To build credit with Self, you need either Permanent Resident or Resident Alien status and a Social Security number.

To learn more about ways to build credit as a new immigrant, check out our post “5 Ways New Immigrants Can Build American Credit.”

4 - You can’t afford a deposit for a secured credit card right now

While secured credit cards can be another useful tool for building credit, sometimes you just can’t afford the $100-$200+ security deposit required.

That’s where Self comes in.

While you pay an administrative fee to open the account, it’s usually no more than $15, and your first monthly payment isn’t due until the next month. See the latest Self account pricing info here.

5 - You don’t have someone who can cosign or add you as an authorized user

Getting a cosigner or being added as an authorized user is a credit-building option for people with close relatives who already have good credit. But not everyone has access to that type of support.

Whether it’s because your relative has no credit or bad credit, or you’re on your own, we understand sometimes you need a way to build credit by yourself, for yourself. The Self Credit Builder Account can help you do just that.

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6 - You need to add positive payment history to your credit report

To build positive payment history with Self, make all your payments on or before your due date for the full amount each month. Once a month, we report your payment history to all three major credit bureaus.

Since your payment history counts for 35% of your FICO credit score, adding more positive history could help your credit.

This one is really up to you though. While we provide a tool that can help you build payment history, it’s how you use that tool that counts. If you make late payments or miss payments, you could hurt your credit instead.

7 - You need an installment loan to add to your credit mix

Your credit mix is another factor that impacts your credit score, counting for 10% of your score.

There are two major types of credit:

  1. Revolving (like a credit card)
  2. Installment (like a car loan, mortgage, or Self Credit Builder Account)

Many lenders want to see evidence that you can responsibly manage both types of credit. A credit builder loan from Self could help by adding to your credit mix.

Final thoughts

Whether a Self Credit Builder Account is right for you is a choice only you can make. Before signing up, take a look at your current credit situation (with the help of a credit counselor, if needed) and try to understand what you need to work on most when it comes to your credit.

About the author

Lauren Bringle Jackson is the Content Marketing Manager for Self and editor of their blog. She's passionate about the intersection of business and social good, smart budgeting and budget travel. She believes you can have an amazing life – even if you don't have the best health or the most wealth.

Written on September 5, 2019

Self is a venture-backed startup that helps people build credit and savings. Comments? Questions? Send us a note at hello@self.inc.

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