Credit scores are no longer just used to determine interest rates on loans and the buyer's ability to pay them back. Consumers are now required to have a good credit score for prospective landlords and employers, cell phone providers, and insurance companies, as well as the usual: personal loans, mortgages, car loans, and credit cards.
A lack of access to credit due to no credit history or adverse credit poses substantial obstacles to reaching the goals mentioned above.
Previously, consumers with bad or no credit had few access options. Today, numerous avenues exist to obtain credit, including online apps to monitor and rebuild one's credit. Since these apps are not created equal, it's essential to be aware of the benefits and detractions of each app. Here you'll find some of the best credit builder apps currently available:
Credit Sweep is a credit management company that offers free templates of dispute letters to challenge any inaccuracies found on a credit report. They also offer two paid tiers of credit report monitoring for $19.95 monthly for their basic plan and $27.95 monthly for their premium plan.
For just $5 a month, Kikoff provides a $750 line of credit for exclusive use in their store. In addition to the monthly fee, subscribers make monthly payments on their outstanding balance, which are reported to Experian and Equifax.
For those with lower credit scores, Mission Lane offers an unsecured Visa card with a $300 credit limit and annual fees ranging from as low as $0 up to $59. The Mission Lane credit card is unavailable in some states and requires bank account verification.
Self Credit Builder
Self Credit Builder sets up a CD for subscribers for as little as $25 a month. The monthly payments are reported to all three major credit bureaus, and the funds are released at the end of the CD term. Interest and fees are deducted from the final balance, and there's a one-time fee of $9 to open a credit builder account.
Unlike most secured cards, Varo's Believe secured card does not charge interest, has a $0 annual fee, and does not mandate a minimum security deposit. The primary requirements are a Varo Bank account in good standing with at least $500 of eligible direct deposits.
Chime has a secured credit card program for those with a Chime checking account, which transfers money to the secured card. Payments are reported to all three major agencies that determine credit scores – Experian, Equifax, and Transunion. In addition to no minimum security deposit required, Chime credit builder cards do not charge annual fees, late fees, or interest charges. Cardholders can also use their security deposit towards payment, a feature not usually offered with secured credit cards.
Captial One CreditWise
Capital One CreditWise is a monitoring service available to Capital One customers and non-customers free of charge. This app allows users to check their credit scores for free, monitor their credit scores, and send automatic alerts if a user's data is discovered on the dark web.
Grow Credit Mastercard
Consumers who want to build or rebuild their credit by leveraging payments made to streaming services and other bills can choose one of four membership plans offered by Grow Credit Mastercard. Users have a low spending limit and cannot carry a monthly balance, but there are no interest charges, credit checks, or fees. Most of the membership plans do not require a security deposit. The membership tiers include a free option and plans for $2.99, $4.99, or $9.99 monthly.
For $2 a month, renters can use the Boom app to build up their credit scores by having their rental payments reported to the three major credit bureaus. For $25, users can submit current rent payments and up to 24 months of previous rental expenditures.
The Petal Card and app has two cards – Petal 1 and Petal 2 – for different consumer groups. The Petal 1 card targets users with adverse credit histories looking to rebuild their credit. The Petal 2 card is for consumers with little to no credit histories who wish to establish credit. Both cards boast no annual fees and cash back with no fees.
Regardless of which app(s) are employed to monitor or rebuild credit, consumers must review each app's features, pros, and cons to ensure their specific credit needs are fulfilled.
This article was produced and syndicated by Wealth of Geeks.