Your credit score is a critical number that determines which loans you get and what types of terms lenders will offer. A good credit score can open more doors and help you save thousands of dollars over your lifetime. CreditStrong makes it easy for people with no credit or bad credit to raise their scores and qualify for better loans.
What is CreditStrong?
CreditStrong is a credit builder lender that gives people the opportunity to build their credit with on-time payments. While you can build your credit with on-time payments for any loan, not every lender wants to work with credit invisibles or people with bad credit scores. CreditStrong offers revolving lines of credit and credit builder loans. They have multiple products available designed to help people build credit.
How Does CreditStrong Work?
CreditStrong lets borrowers choose among several financial products designed to improve their credit scores. The company’s products help people with four key components of their credit scores: payment history (35%), credit utilization (30%), length of history (15%), and credit mix (10%). These four categories influence 90% of your credit score, and since CreditStrong doesn’t do hard credit checks, the company won’t hurt your score.
As long as you make on-time payments, your FICO score will grow. You can get a credit builder loan or line of credit even if you have no credit or bad credit. CreditStrong has secured financial products which require security deposits. For instance, if you want to take out a $1,000 credit builder loan, you will have to put down $1,000. After you pay off the loan, you will receive your principal back.
This arrangement means you should probably seek another lender if you have an emergency expense and need to access extra cash. However, CreditStrong makes a high credit score more accessible and can make loans more attainable during emergencies.
What Products Does CreditStrong Provide?
CreditStrong provides several products that can improve your credit score and give you more financial flexibility. Here’s the line-up of products you can explore.
Revolv. is a revolving line of credit that lets you build your score without a credit card. Credit limits start at $500, but you can raise your limit with monthly payments. Borrowers receive an extra $100 on their credit limits if they make three consecutive on-time payments. The maximum credit limit is $1,000.
CreditStrong reports your payment history to all three major credit bureaus — Experian, Equifax, and TransUnion. CreditStrong does not conduct a hard credit check when giving out credit lines through Revolv. You will receive a free monthly FICO score if you take out a line of credit with CreditStrong.
A Revolv. line of credit requires a $99/yr subscription fee that you can cancel at any time.
Instal. is a credit builder loan that CreditStrong offers its customers. These loans do not involve hard credit checks, and you can choose a term ranging from 2-3 years. CreditStrong will report your payment history to the three major credit bureaus, and you will receive a free monthly FICO score update. Borrowers must make a security deposit equal to the loan’s value.
CreditStrong offers three plans for its credit builder loans. You can pay $28/mo to take out a $1,010 credit builder loan with a 48-month term. That is the most affordable plan.
You can also pay $38/mo for a $1,100 credit builder loan with a 36-month term or pay $48/mo for a $1,000 credit builder loan with a 24-month term. You pay more money each month to get out of the loan sooner. These loans have penalty-free cancelation and don’t have interest payments, but the monthly fee is practically the interest. $28/mo for a $1,010 loan comes to $336/yr in fees. That converts to a 33.27% interest rate that is labeled as a fee.
CS Max loans are for people with plenty of cash who need to quickly build their credit scores before getting a big loan. You can borrow $2,500 to $25,000 as a credit builder loan and pay monthly fees. These loans let you build up to 60 months of credit history through on-time payments.
Demonstrating your ability to pay off larger debts can help you improve your credit score faster. CreditStrong plans also let you cancel at any time, but you should assess the monthly fees before committing to a plan.
If you want a $2,500 installment account with a 5-year term, you will have to pay $60/mo. You can get a $5,000 credit builder loan with a 5-year term through the $99/mo plan. Paying $199/mo will get you a $10,000 installment account with a 5-year term. Opting for a $25,000 installment loan with a 5-year term will cost you $449/mo.
Build Credit for Teens
CreditStrong offers FreeKick, a financial product that helps parents build credit for their minors and young adults. The credit building plan is for teens and young adults aged 14 to 25 years. Helping your teen or young adult build credit early can give them many advantages in life, such as higher loan amounts and lower interest rates.
FreeKick costs $49/mo if you make a $1,750 deposit and $99/mo if you make a $1,000 deposit. However, it is free if you make a $2,500 deposit. All deposits are insured by the FDIC. FreeKick accounts have 12-month terms that can get renewed annually to build additional credit for teens. When your account matures or gets closed, 100% of your deposits are returned to you.
FreeKick is offered by Austin Capital Bank. Austin Capital Bank is an FDIC-insured bank and an independent community bank.
What are the Pros and Cons of CreditStrong?
Are you on the fence about getting started with CreditStrong? Here are some of the pros and cons to consider.
- Build your credit: You can make on-time payments for CreditStrongproducts and know that they will get reported to the major credit bureaus.
- Get free monthly FICO score updates: CreditStrong lets you know where you currently stand each month so you can track your progress toward your credit score goal.
- No hard credit check: Obtaining a financial product from CreditStrong will not hurt your credit score. CreditStrong does not have credit score requirements for its loans.
- Opportunity for teens and young adults: FreeKick can jumpstart your child’s path to a good credit score.
- High monthly payment plans: Sure, you don’t have to pay interest. However, you should think of the monthly plan as a high-interest payment. You can end up paying over 30% of the loan’s value each year for the monthly payments.
- Secured loans: If you need to borrow money urgently for an emergency expense, CreditStrong isn’t the right lender for you. Secured loans require initial deposits and help you build credit. You only receive the initial deposit back once you pay off the loan.
- Low loan amounts: You can only borrow up to $1,000 for most of CreditStrong’s financial products. CS Maxloans have higher loan amounts, but you need to make the initial deposit to get the loan.
How Long Does It Take to Build Credit with CreditStrong?
Each person has a different experience with building credit, but you can typically see results within 3-6 months if you make on-time payments.
Does CreditStrong Have Any Fees?
CreditStrong has a one-time administrative fee you have to pay before getting a loan. This is a one-time, non-refundable fee. You should also look at the monthly payments for the plans. That’s where the bulk of your costs will be for any CreditStrong product.
How Does CreditStrong Compare?
CreditStrong has several financial products that can help you rebuild credit or establish a credit history if you don’t have any. The loan terms and maximum loan amounts are typical for a credit builder lender, but CS Max loans have higher loan amounts and term lengths than most credit builder lenders.
CreditStrong is a bit more expensive than some of the alternatives for building credit. You can get a secured credit card with no annual fees and avoid interest payments. You can also avoid secured credit card interest rates if you pay your balance in full at the end of each billing cycle.
CreditStrong truly shines with FreeKick, the company’s credit building opportunity for teens and young adults. A $2,500 deposit allows you to set up a free account and build your child’s credit. This route can be more advantageous than adding your child as an authorized user for your credit card.
Is CreditStrong Worth It?
CreditStrong is an expensive choice among credit builder lenders. While the loans don’t have interest, the monthly payments are expensive for what you are getting. You can find credit builder loans with interest rates below 20% APR. CreditStrong monthly payments spread across a year often add up to over 30% of the loan’s value.
You get more value for your money with a CS Max plan and can build your credit score quicker if you have the extra cash for a high-security deposit. FreeKick provides a lot of value for parents who want to jumpstart their children’s credit score growth.
How to Get Started with CreditStrong
CreditStrong offers several financial products that can improve your credit. You can visit CreditStrong’s website and look through their products to determine the right one for you. Consumers must create CreditStrong accounts to get access to credit builder loans and lines of credit.