2019-09-12 06:56:15

Self Lender, recently rebranded as Self, helps consumers and business owners alike to start building their personal credit from scratch or work on rebuilding their credit after some missteps. 

A survey by Nav found almost 40% of its small business customer base were considered “credit ghosts,” consumers so little credit history that getting financing could be difficult. A Self Lender loan can be a way to help develop a more robust credit history.

While it’s geared toward improving your personal credit instead of your business credit, new business owners who rely on their personal credit to gain access to financing may benefit from a Self Lender credit-builder account. Here’s all you need to know in this Self Lender review.

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Rates and fees

Interest rate 12.37% to 15.92% APR
Administrative fee $15 or less
Early termination fee Less than $5
Late payments fee 5% of the payment amount if your payment is 15 days past due
Convenience fee 2.99% plus $0.30 if you use a debit or prepaid debit card to make payments


  • Choose a monthly payment of $25, $48, $89 or $150, which you’ll pay over 12 or 24 months, based on the payment amount.
  • Loan proceeds are placed into a certificate of deposit (CD) account and earn interest over the life of the credit-builder account.
  • Self does not run a hard credit check when you apply, so you won’t be denied based on past credit issues or no credit history. Approval isn’t guaranteed, however.
  • There is no minimum income requirement to get approved.
  • Interest rates range from 12.37% go 15.92% APR, depending on your payment terms.
  • Making on-time payments can help improve your credit score over time.
  • Reports your payments to all three major credit bureaus, including Experian, Equifax and TransUnion. You’ll need to provide a Social Security number for this.

Nav’s verdict

A Self credit-builder account won’t help you establish a business credit history. But if you’re new to credit or you’ve made some serious credit missteps, it can be hard to get approved for financing for your company. 

With no credit check, Self makes it possible to avoid having to search for a credit card that will approve you. You also don’t need to put down a security deposit, which is common among business secured credit cards. 

What’s more, a Self credit-builder account offers relatively low interest rates for new-to-credit and bad-credit borrowers — much lower than you can expect from a credit card.

The only drawback to consider is that unlike a traditional loan, you don’t receive the account proceeds upfront. If you’re looking for financing for bad credit that provides capital now, Self isn’t for you.

Self Lender review details

Self offers a low-risk way for entrepreneurs to add a positive credit reference to their credit reports, without the temptation of running up balances on credit cards. But because credit-builder accounts function differently than traditional loans, it’s important to know what you’re getting before you apply.

A credit-builder account, also sometimes called a credit-builder loan, is a short-term installment loan. When you first apply, though, Self deposits the loan funds into an FDIC-insured CD account instead of giving them to you like you’d experience with a personal loan or other loan types.

From there, you’ll make monthly payments based on your agreed-upon loan terms, and the loan shows up on your credit reports as a new tradeline with the credit bureaus. As you make on-time payments, the positive payment activity can help boost your credit score. 

Once your repayment term is complete, the CD will mature, and you’ll receive the loan funds minus any interest owed on the loan.

As you work on building your credit with a Self credit-builder account, the company offers access to your VantageScore credit score to track your progress and provide some form of credit monitoring. 

Note, however, that most of the top lenders use the FICO score, so while it may be helpful to know which ballpark you’re in, it’s likely not the same score that will be used when you apply for credit in the future.

Getting approved for a Self credit-builder account can be easy even with a terrible credit history because the lender doesn’t use your credit history to determine whether you qualify for a credit-builder account. Instead, it uses ChexSystems, a consumer reporting agency that keeps track of your bank account history. 

You don’t need to have an existing checking account to get approved. And once your account is set up, you can make payments with a debit card, prepaid card or bank account. If you choose one of the first two options, however, there is a convenience fee of 2.99% of the payment amount plus $0.30.

How much does Self Lender raise your credit score?

Credit scores aren’t an exact science, and how a Self credit-builder account affects yours can depend on a lot of factors, including but not limited to:

  • Your past payment activity
  • How long you’ve been building credit
  • How many tradelines you have in your credit file
  • Your credit card usage
  • Whether you make your monthly payments on time or not

In other words, there’s no telling exactly how much the loan will raise your credit score. That said, it’s important to know how it can help you.

For starters, it creates a new credit account, or tradeline, on your credit reports. The more tradelines you have, the more information the credit scoring models have to determine your score. As you make on-time payments, it also helps improve your payment history, which is the most important factor in your FICO credit score. 

Finally, because it’s an installment loan and not a secured credit card, it doesn’t put you in danger of having a high credit utilization rate — a credit card’s balance divided by its credit limit — which can hurt your score rather than help it.

Self Lender early withdrawal

The purpose of a credit-builder loan is to help you establish a positive credit history. So in a normal scenario, it’s best to keep the loan for the duration of your repayment term to give yourself a broader payment history.

But if something changes and you need to pay it off sooner, you can do that. The only catch is that because your funds are held in a CD account, there’s typically a penalty associated with an early withdrawal before the account matures. 

According to Self, that fee is typically less than $5, so it likely won’t have a huge impact on your decision. And if you need to close your Self credit-builder account early because of financial hardship, the company may be willing to work with you on the situation.

Self Lender competitors

Self credit-builder accounts are a great tool for helping people improve credit, but the company isn’t the only one that makes it possible. 

Credit Strong

Credit Strong offers a similar product that comes with many of the same features, including:

  • Monthly payments that include $24, $48 or $96 over 12 or 24 months
  • A one-time $8.95 fee to activate your account
  • Reporting to all three credit bureaus
  • No hard credit check and no security deposit, which would occur with a secured card
  • You receive the loan funds at the end of the repayment term
  • APRs range from 11.69% to 15.82

Overall, Credit Strong offers slightly lower interest rates and a little more flexibility with your repayment options. Also, the lender provides borrowers with a FICO credit score instead of a VantageScore, which gives you a more accurate picture of what future creditors see when you apply for a business loan or credit card.

Credit unions

Many credit unions offer credit-builder loans with varying repayment terms that do something similar, although it may be a savings account that your money is placed in instead of a CD account. 

For example, 1st Financial Federal Credit Union offers one with a flat 12% APR, 12-month terms and loan amounts ranging from $300 to $1,000. That money is placed in a savings account while you make payments. And as a twist, the lender refunds 50% of the loan’s interest if you make all your payments on time.

Randolph-Brooks Federal Credit Union also offers a credit-builder loan from $300 to $2,500, which you can repay over six to 36 months, giving you a little more flexibility. However, the lender doesn’t disclose interest rates upfront.

In general, credit unions tend to offer lower interest rates and fees than other financial institutions. But you need to be a member of one before you can apply for its credit-builder loan, and many credit unions have strict eligibility requirements for those who can join.

Check with your local credit unions to find out what your options are.

Self Lender reviews in 2019 by customers

Self has 4 out of 5 stars by customers on Facebook and an A- rating from the Better Business Bureau. Among the positive reviews, customers shared how the loan helped improve their credit score but no information about their experience working with Self directly. 

Among the negative reviews, many complained about not seeing improvements to their credit score, which could happen with any type of loan depending on the various factors that go into a credit score, and isn’t the fault of the lender. 

One area where Self received several complaints, however, was the timing of the loan disbursement. The website states that it takes 10 to 14 business days to disburse the loan funds after you’ve made your last payment, which can translate to close to three calendar weeks in some cases. Among customers who needed the money sooner, that’s too long. 

If you have good credit, you likely don’t need a credit-builder account. But if you have poor credit, it can help. As you consider whether Self is right for you, consider the pros and cons and other customers’ experiences. Also, compare its terms with Self Lender competitors and secured credit cards.

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