Key takeaways
- If you're looking for ways to improve your credit score quickly, the Self–Credit Builder Account with Secured Visa Credit Card might be able to help.
- This tool combines the use of a loan and a secured credit card to show credit bureaus that the account holder is a responsible borrower.
- Like any tool for building credit, however, it's only helpful when used correctly — so be sure to make payments on time and not overspend when setting up your account plan.
The Self–Credit Builder Account with Secured Visa® Credit Card is a unique tool for consumers who want to speed up either their initial credit journey or their credit recovery.
The Self Secured Visa doesn’t offer a rewards program of any kind, and it also carries a $9 non-refundable, one-time administrative fee and an annual fee of $25. There are also interest charges, some of which you can’t avoid. Still, this combination of accounts might be worth considering if you want to build your credit faster than a secured credit card alone can allow.
How to sign up for the Credit Builder Account with Self Secured Visa
As the name suggests, you’d get two credit-building mechanisms in one when you sign up for the Self–Credit Builder Account with Secured Visa:
- The Self Credit Builder Account*— a fixed installment loan that exists solely for the purpose of establishing your credit history.
- The Self Secured Visa credit card —a secured credit card that can be used anywhere in the U.S. where Visa cards are accepted. It will also help you to boost yourcredit score.
The Self–Credit Builder Account with Secured Visa might be a little more complicated to set up than a simple account and secured credit card. But once you’re approved, it’s easy to use. First, you apply for a Self Credit Builder Account and make three monthly payments on time. Then, provided you have $100 or more in savings and your account is in good standing, you can choose your credit limit (minimum $100) and order the Secured Visa card. Once you receive and activate your card, you can start using it anywhere in the U.S. that accepts Visa.
Features of the Self Secured Visa and Credit Builder Account
Deciding whether this card and account combo is right for your needs means understanding what it can offer you. The following are some of the main features of the Credit Builder Account and Self Secured Visa:
Since this tool combines the Credit Builder Account with the Secured Visa Credit Card, you’re getting an installment loan and revolving account with the same product. Both FICO and VantageScore value ahealthy mix of installment and revolving accounts because it shows you can handle different types of accounts responsibly.
This is not a major driver in credit score calculations compared to other factors, but it’s still something to consider if you need all the help you can get to improve your credit score quickly.
The Self Secured Visa is specifically designed to help people withno credit history,bad credit history or limited credit history.
Your Credit Builder loan is held in a certificate of deposit (CD) account, which earns interest that is paid when your loan matures. However, keep in mind that you’ll still have to pay a certain amount of interest to Self for providing you with the loan, so that will negate some of the CD’s value.
One important difference between standard secured credit cards and the Self Secured Visa is that the latter doesn’t require you to pay asecurity deposit upfront. Instead, you’ll choose how much of your Credit Builder Account savings (min. $100) you want to serve as your security deposit and credit limit.
You’ll qualify for the Self Secured Visa after three months of timely payments, if you have at least $100 in your Credit Builder Account and your account is in good standing — without having to complete a separate application.
Of course, having to wait at least three months to get the card is less than ideal, but your loan payments will be reported right away. Plus, there’s nohard credit pull for the Self Secured Visa.
Having a card that reports to allthree bureaus — Experian, Equifax and TransUnion — can help you build credit because some lending institutions only contact one of them when you apply for a loan or credit card. Using your Self Secured Visa and Credit Builder Account responsibly ensures that your future lenders will have an updated credit score when they consider your application.
There are no outstanding perks or benefits associated with the Self Secured Visa credit card, but you’ll have access totraditional Visa benefits like:
- Lost or stolen card reporting
- Cardholder inquiry service
- Emergency card replacement and cash disbursem*nt
- $0 liability for unauthorized purchases
- Pay-per-use roadside dispatch
Maximizing the Self Secured Visa and Credit Builder Account
Once you’re ready to start using your new accounts, keep the following tips in mind:
With the Self Credit Builder Account, you can typically choose to deposit $25, $35, $48 or $150 per month over a 24-month term (length may vary).
However, taking on a larger loan doesn’t necessarily mean you’ll build or rebuild your credit faster. Make sure you choose the plan you can stick with comfortably for the length of the loan’s term.
Self helps you to build orrebuild your credit by reporting your timely payments to all three credit bureaus, but it reports late payments as well. If you’re not careful, you may find yourself in a situation where you’re paying fees and interest to build your credit, only to find your credit score plummeting. To make sure that doesn’t happen, do your very best to avoid late payments.
You’ll pay an expedited payment fee of $3.50 if you use a debit card to pay your Self Secured Visa balance. Although doing so updates your available balance more quickly, there’s no fee for paying your balance via ACH bank transfer, so choose this option whenever possible.
Finally, don’t pay off your Self account early if you can help it. Remember that credit bureaus want to see how you can handle payments over the long term. Closing your account early may sabotage your efforts to raise your score.
The bottom line
Using theSelf–Credit Builder Account with Secured Visa® Credit Card is a good way to bolster your credit profile. It’s a solid credit-building tool that provides consumers with the type of credit mix favored by both FICO and VantageScore credit formulas, which means the tool can raise credit scores more quickly.
This functionality, however, comes at a price. Not only does the Self Secured Visa have an annual fee of $25 and a non-refundable $9 administrative fee, but there are also finance charges you’ll have to pay along the way. While you can avoid the whopping 26.99 percent variable APR by paying your credit card bills in full, you can’t avoid the interest payments on your credit builder loan (which vary depending on the account you choose; see theSelf pricing page for more details).
Also, keep in mind that FICO’s credit mix typically only amounts to 10 percent of your credit score. So unless you need to accelerate your credit recovery by all means possible, you may want to consider othertop secured credit cards. For example, theDiscover it® Secured Credit Card comes with no annual fee and a cash back program. You may even be able to qualify for an unsecured credit card — like the Mission Lane Visa® Credit Card* or thePetal® 1 “No Annual Fee” Visa® Credit Card* — which are designed for people with no credit or bad credit.
Information about the Mission Lane Visa® Credit Card and the Petal® 1 “No Annual Fee” Visa® Credit Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the issuer.
Issuer-required disclosure statement
All Credit Builder Accounts made by Lead Bank, Member FDIC, Equal Housing Lender, Sunrise Banks, N.A. Member FDIC, Equal Housing Lender or Atlantic Capital Bank, N.A. Member FDIC, Equal Housing Lender. Subject to ID Verification. Individual borrowers must be a U.S. Citizen or permanent resident and at least 18 years old. Valid bank account and Social Security Number are required. All loans are subject to ID verification and consumer report review and approval. Results are not guaranteed. Improvement in your credit score is dependent on your specific situation and financial behavior. Failure to make monthly minimum payments by the payment due date each month may result in delinquent payment reporting to credit bureaus which may negatively impact your credit score. This product will not remove negative credit history from your credit report. All loans subject to approval. All Certificates of Deposit (CD) are deposited in Lead Bank, Member FDIC, Sunrise Banks, N.A., Member FDIC or Atlantic Capital Bank, N.A., Member FDIC.
