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News: Credit Builder Accounts to Build Credit -

When you are struggling to build your credit because you have no credit history or rebuilding your credit, you can consider a credit builder account.

A credit builder account, or a credit builder loan, isn't a traditional loan. With a traditional loan, you usually receive the money you are borrowing upfront and pay it back over time. But everything is vice versa with a credit builder loan: first you make fixed payments to a lender and then get access to the loan amount at the end of the loan's term.

Credit builder accounts are usually offered by small banks, credit unions and online lenders (also known as neobanks). You likely won't find a credit builder loan at large financial institutions like American Express.

- Self - Credit Builder Account: helps you build credit history with three different credit bureaus in 24 months.

- Kikoff Credit Builder: offers two products: Kikoff Credit Account (a revolving line of credit) and Kikoff Credit Builder Loan (a 1-year savings plan).

- Chime Secured Credit Builder Visa® Credit Card: a secured account that allows to spend up to the amount added and it won't be reported as a high-utilization.

- Zolve Azpire Credit Builder Mastercard Credit Card: a great option for students and those moving to the U.S.

- Credit Strong: offers three credit building products: Revolv, Instal, and CS Max.

- Kovo - Credit Builder Account: allows members to build credit and earn rewards.

Credit builder accounts often promise no credit check or soft pull only. Loan amounts usually range from $300 to $1,000 and are kept in a savings account or a certificate of deposit (CD). You don't usually have access to that money until you pay off the loan. Depending on the offer, the loan might earn interest.

Once your credit builder account is approved and set up, you start making payments toward the loan. Your payments will include interest and are spread over the course of six to 24 months. The lender will report your payments to the credit bureaus, and if you are not on time with a single payment, that will be reported too. So, if you miss payments or pay late, you may not be able to build or improve your credit.

When you've made all your payments on time and the loan's term is over, your lender will unlock the funds in your savings account or CD and make them available to you. Thus, at the end of the loan's term, you will have the money and improved credit.