THE NO JOB LIFESTYLECommon kinds of app
- Builder loan apps: Self and similar apps take monthly payments toward a locked savings account and report them. You receive the money at the end, minus costs.
- Secured style cards: Chime Credit Builder and others link to an account you fund, and they report like a card.
- Small credit lines: Kikoff and others offer a low limit for use in their store, usually with a low monthly fee.
- Bill reporting: Experian Boost is free and adds eligible bills to your Experian file. Rent reporting apps usually charge a fee.
- Monitoring apps: Credit Karma and others show your score, but do not by themselves add history.
Terms and fees change over time, so please read the current offer in each app. We name these as examples, and not as recommendations.
What to check before downloading
- Which bureaus: all three is ideal. An app that reports to just one or two gives less coverage.
- Total yearly cost: a $10 monthly fee equals $120 a year, which is more than many secured cards cost.
- What is being reported: an account type, its limit and on time payments.
- Inquiry: many of these apps avoid a hard pull, but check.
- Bank link: some require a checking account or direct deposit.
- Late penalties: a missed payment can be reported, and that can hurt.
Matching an app to your situation
No credit at all: one builder loan or secured style card, with autopay turned on, can begin a file in several months. Bad credit from old items: first read your reports and check for errors, then add one new positive account. High card balances: an app may do less for you than paying down what you already owe. Rent paid on time for years: a rent reporting service might be worthwhile if the score used counts that data, and FICO 8 does not.
Avoid stacking several apps at once. Too many new accounts can lower your average age, and each one is another payment to remember. Pick one or two, run them for at least six months, then reassess.
Protect your data and money
Apps may want bank logins, your Social Security number and other sensitive information. Download only from the official app stores, read the privacy policy and check the company with the Consumer Financial Protection Bureau complaint database. Be wary of any app claiming to boost your score by a set number of points, or offering to delete negatives instantly.
Also think about what happens when you stop. Closing a builder loan early might mean fees or a reduced payout. Closing a card style account removes its limit, and it could later stop adding new data. Read the exit terms up front, and keep your statements for your records.
Questions people ask
Do you need an app to build credit?
No. A low fee secured card or a credit union builder loan does the same job, sometimes for less money.
Are credit building apps safe?
Well known apps are generally safe to use, but read reviews and complaints. Keep your logins private and use strong passwords.
Will you get the money back from a builder loan?
Usually yes, once the term ends, minus fees and interest. Check the numbers, since you will rarely get back all you paid.