The average American has a credit score of 717, as reported by the credit scoring service FICO. On the flipside, about 12.6% of Americans have a credit score between 300 and 579, as noted by Experian. If you have bad credit or no credit history, it might be difficult to build your credit history because lenders may not approve you for typical credit-building products like credit cards or loans — but you don’t have to take that traditional path to boost your credit.
Credit-building apps offer an alternative way to help build your credit history. The best credit-building apps feature products like credit-building loans, secured cards with no interest charges, and no hard credit checks. There are even apps that help build credit history with subscription services you already pay for every month.
Finder’s banking experts analyze over 25 credit-building apps and products to find the best. We compare monthly fees, reporting activity, availability and more. Our methodology stipulates that the best credit-building apps must meet this criteria:
These credit-building apps and services fell just short compared to apps like Self, Cleo and Fizz. These apps either didn’t make the cut because they don’t report to all three major credit bureaus, the monthly fees were above our cutoff or their offerings are less flexible than the best.
Credit-building apps are becoming more popular as people look for alternative ways to build their credit history. While all of the apps may promise credit-building opportunities at some level, here’s how to compare them so you know you’re choosing the right one for you:
Credit-building apps are worth it if you can responsibly manage them. These apps can offer credit-building loans and secured cards with no interest charges and add bills to your credit reports that otherwise wouldn’t be there, like rent payments or your Netflix subscription.
The biggest benefit you can gain from credit-building apps is the payment history. Payment history makes up 35% of your FICO credit score, so making on-time payments every time can greatly improve your credit history. Keeping credit card balances under 30% of their borrowing limit and having different types of credit can also help improve your credit score.
Just keep in mind that credit-scoring models are complicated, and everyone’s credit history is different. If a credit-building app promises a certain point increase, consider that a red flag because it’s never guaranteed.
Credit-building apps can offer alternative methods for building a positive credit history. Since many of these apps don’t have hard credit checks, you can start building credit without needing good credit to be approved.
If you’re unsure about your ability to manage a credit-building app, consider alternative ways to build your credit history.
Self offers rent reporting, utility reporting, credit-building loans and secured credit cards. Some apps like Self with similar products include Kikoff, Chime Card™ and MoneyLion.
Whether a credit score app is accurate depends on what credit scoring model the app is using to show your credit score. There are two main credit-scoring models: VantageScore and FICO Score. Lenders typically reference your FICO credit score when you apply for new credit, as it’s the oldest and most established model. If you want to know what credit score lenders will see, we recommend checking your FICO credit score.
Plenty of apps offer real credit scores, and some offer “educational” scores, which are more like educated guesses. A popular app is myFICO, which can show your real FICO credit score generated from any of the three major bureaus.
Building your credit history from scratch is typically faster than improving a poor credit history, but there are plenty of ways to build credit fast. Removing negative marks from your credit reports can quickly improve your score. And if you have no credit history, adding active credit accounts can mean a quick boost if you maintain a positive payment history.
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The Chime Credit Builder Card can help you build credit without charging interest and doesn’t require a deposit or monthly fee.
Top apps like Self that build credit include Kikoff, Grow Credit, Chime Card™, Credit Strong and Cleo.
Top alternatives to Kikoff for easy credit-building include Self, Cleo, Grow Credit, Chime and Mine (Fizz).
The Cleo Credit Builder card is best for anyone looking to build credit without a credit check or high interest rates.
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