Improving Your Credit With the Self Credit Builder [Complete Guide]

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Trying to build new credit can be very frustrating. No one will give you credit because you have no credit history, and you can’t build a credit history because no one will give you credit!

The same is true of having a bad credit history. No one wants to give you a second chance, although your circumstances may have improved. It’s a vicious cycle to be caught in, and you might feel like there’s no solution.

If you find yourself in this situation, however, you can take comfort in knowing that there are options that are entirely within your control.

One little known self-directed alternative for building credit is an account offered by the company Self, formerly called Self Lender.

The account is referred to as a credit builder account, and it can help you build your credit history while you save. Sound appealing? The account isn’t for everyone, but if you’re looking for a risk-free way to build or rebuild your credit, it may be a great option.

Today we’ll discuss everything you need to know about the credit builder account and help you determine if it’s an option that can help you.

What Is Self?

Self is a national company based in Austin, Texas. It’s accredited by the Better Business Bureau and partners with Sunrise Banks and Lead Bank to offer credit builder accounts to the public in all 50 states.

Credit builder accounts are designed to allow you to establish credit history while saving money over a 12- or 24-month period.

Your money is kept safe in an FDIC-insured CD and returned to you at the end of the credit builder account period.

It’s one of the safest, most responsible ways to build credit when you have no credit or bad credit history.

Why You’d Want to Use Self

Poor Credit Score Report
For those with no credit or bad credit, the benefits of using Self can be many. Image Credit: Casper1774 Studio via Shutterstock

If you have no credit history, but you have some cash, you might want to apply for a secured credit card. A secured credit card requires you to deposit an amount of money with the credit card company until you have proven you can manage credit well or until the account is closed at a future date.

If you have no credit history or bad credit history and do not want (or are unable) to come up with a deposit for a secured credit card, your options are few for building or rebuilding credit.

A credit builder account with Self is an option, however, and offers the following benefits:

  • Savings plans start at $25 per month and include credit monitoring
  • Reports to all 3 major credit bureaus (TransUnionEquifax, and Experian)
  • No hard pull on your credit report and no credit history required
  • Self helps you get a small loan that you save in a CD for 12 or 24 months (FDIC-insured certificate of deposit bank account)
  • You save money while you build credit

Self’s credit builder account can be a viable solution for those with no credit or bad credit histories.

Bottom Line: If you have no credit history or bad credit and want to build credit without having to deposit funds for a secured credit card, the Credit Builder account from Self may be a good solution.

First Step  Knowing Your Credit Score

Credit Score Experian
Knowing your credit score can help you select the appropriate options for improvement. Image Credit: Experian

You might ask: “Why do I need to know my credit score?” Your credit score affects your options for building credit. If you have a fair to good credit score you may have more options available to you than just the credit builder account we’ll be discussing.

Securing a credit card, making small purchases, and paying off your account each statement period can accomplish the objective of improving your credit.

That’s why knowing your credit score is always a good place to start.

You don’t have to pay to obtain your credit score, either. There are several free options available including Discover’s free credit score tool that is available to everyone.

Additionally, your credit score is available, free of charge, on trustworthy sites such as Credit Karma (review) or Credit Sesame (review).

Bottom Line: You’ll only want to consider a credit builder account if you cannot qualify or afford other alternative means of building or rebuilding your credit history. You can start to identify your options by knowing your current credit score.

Why You Might Want to Improve Your Credit Score

Bad credit can hurt you and cost you a lot of money. Having good credit allows you to:

  • Get approved for an apartment
  • Land that bank job you want (or another job that requires a credit check)
  • Finance a vehicle without paying high-interest rates
  • Pay lower insurance premiums (in some states)
  • Qualify for a cell phone with no large down payments or required prepayment
  • Put utilities in your name without a large required deposit
  • Qualify for a mortgage

Regardless of your reason for wanting to improve your credit, getting started on the right path is critical.

Let’s take a look at Self’s credit builder account and how it might help.

How Does a Credit Builder Account Work?

The Self’s credit builder account is basically a secured loan that doesn’t require a hard pull on your credit. It also does not require you to have a credit history.

You can even be approved for a credit builder account with poor credit.

Here’s how the credit builder account works:

  • Apply for the loan online (no hard credit pull on your credit)
  • Once approved, the loan funds are deposited into a bank certificate of deposit in your name
  • The funds are held as collateral until the loan is repaid
  • You make scheduled monthly payments on the loan
  • Your positive payment history is reported to the 3 major credit bureaus
  • You receive the funds that are in the account at the end of the term (12 or 24 months)

There’s interest charged on the loan, but it’s not excessive. You can select a custom payment plan that fits your budget, and you do earn a small amount of interest on the account.

Bottom Line: The Self credit builder account is easy and quick to apply for, helps you build a positive credit history while you save, and the monthly payment can be tailored to fit your budget. 

How Much Does a Credit Builder Account Cost?

Credit Builder Account
Select an account with a monthly payment you can afford. Image Credit: Self

Just like a loan secured from a bank, the credit builder account charges interest. Unlike a bank loan, however, Self doesn’t access your credit history making your chances of approval extremely high.

Let’s take a look at the cost of a 12-month credit builder account with a selected monthly payment of $48.

  • Non-refundable Set Up Fee: $9
  • Monthly Payment: $48
  • Number of Payments: 12
  • Total Amount Paid In: $585
  • Total Amount Received at the End of 12 Months: $539
  • Net Cost of Credit: $46

Is $46 worth establishing a full year of good credit? This is for you to decide, but if your options are limited, it could be a wise choice.

After improving your credit score, you’ll be able to secure credit more easily than with poor credit. You’ll also open the door to opportunities you didn’t have previously.

Hot Tip: Spending a small amount of money to improve your credit score can be an excellent investment. You’ll save far more than that in the long run when you pay lower interest to secure car financing, a mortgage, or other needed credit, in the future. 

Everything Else You Need to Know

Self uses ChexSystems’ consumer reports to help determine eligibility for a credit builder account.

This report shows items such as unpaid overdraft fees, bounced checks, suspected fraud, and other negative banking histories. You could be denied a credit builder account if you have a negative ChexSystems report.

Fortunately, the denial doesn’t show on your credit report and you may apply again once you have cleared up your ChexSystems report.

A credit builder account does pay interest, but it’s minimal, just one-tenth of a percent, so not worth including in the cost calculations.

Selecting an affordable monthly payment for your credit builder is important as missed or late payments are charged a fee. Late payments also negatively affect your history.

In addition to the credit builder account, Self offers the option of a Self Visa® Credit Card. The card is secured by your credit builder account and is available to those who have made 3 or more on-time payments, have at least $100 saved in the account, and their account is in good standing.

Final Thoughts

While having no credit or even bad credit can seem futile, there are many ways to get started on the path to improving your credit.

A credit builder account from Self may be a good solution for you or there may be other options that are a better fit.

We’ve compiled several guides that can help you build/rebuild your credit and help you find credit card options that may match your current credit score.

Additionally, to find out if you have current credit card offers you can use tools such as the CardMatch tool. Using the tool doesn’t affect your credit score and can yield some interesting results.

Don’t despair if you have no credit or bad credit as there’s always a path to improvement.

Frequently asked questions

Is Self legit?

Yes. Your funds are insured by the Federal Deposit Insurance Commission (FDIC) which is an independent federal agency that insures deposits in U.S. banks.

Also, Self is an established company located in Austin, Texas, and accredited with the Better Business Bureau.

The company also partners with established financial institutions including Sunrise Banks and Lead Bank.

How much does a Self credit builder account cost?

The highest APR stated on the Self website is 15.65%, but the amount will vary based on the selected monthly payment and the term of your account.

Example: For an account with a $48 monthly payment, the total of payments made after 12 months would be $576. The total amount you would receive at the end of 12 months would be $545. This works out to a 12.44% APR.

There’s also a $9 administrative set-up fee.

How do I get my money back from Self?

Your credit builder account will be established for either 12 or 24 months. You won’t be able to access your money during that time as it’s locked in a certificate of deposit held with one of the partner banking institutions.

Once all your monthly payments have been made and your account has ended, you’ll receive an email telling you the account has matured. The funds will then be available to you and you can select a payout method.

It typically takes 10 to 14 business days to process the payout and for you to receive your money.

Does Self check my credit?

Self does not do a hard pull on your credit report like a typical lending institution would.

It does check for other financial indications such as fraud, bounced checks, and negative banking history by running a ChexSystems report.

If you should be denied because of information found on that report, you can reapply after you have cleaned up your ChexSystem report history.

Can I close my Self credit builder account early?

Yes, you can close your credit builder account at any time by paying off the remaining balance.

However, if you opened the account to build a positive credit history, closing the account early may not give you the desired credit history you were trying to build by opening the account.

You can also be charged an early termination fee.

Be sure to select a monthly payment you can afford and a time frame you can live with.

What happens if I can't make my Self credit builder payments?

If your payment is more than 15 days late, you will be assessed a 5% late fee.

If your payment is more than 30 days late, the payment will be reported as late to the credit bureaus.

If you know that you’re going to be more than 30 days late, you should contact Self customer service in advance.

Christine Krzyszton

About Christine Krzyszton

Christine, who lives in Northern Michigan, travels about 300,000 miles a year despite her remote location. Her expertise is traveling the world on a weekend with no pre-determined destination in mind, letting the cost of the airfare determine where she will go. She has over four million flown miles and elite status on all three major domestic carriers.

Disclaimer: Any comments listed below are not from the bank advertiser, nor have they been reviewed or approved by them. No responsibility will be taken by the bank advertiser for these comments.


  1. Anonymous July 12, 2019

    Self Lender’s administration fee is not $5.


    • Thanks for the alert. The administration fee was $5 when this article was originally written but I have confirmed that it has increased to $15. We’ll update that information.


  2. Why do I need a cell phone to receive loan? I only have a home phone (land line.)


  3. Robin Stemple May 28, 2020

    It is more beneficial to do a 12 or 24 month plan.


  4. Anthony Hernandez June 7, 2020

    What happens to my money if they close my account because I didn’t make payments?


    • If you have a financial hardship and cannot make your payments, Self Credit Builder suggests you contact them as soon as possible. There are late fees and consequences for not making your payments and the upfront administrative fee is not refundable if the account is closed. Your specific contract will have the exact terms that you can review before completing the application. On the Self website it states, “If a loan payment is more than 15 days past due, you will be charged a late fee equivalent to 5% of the scheduled monthly installment amount. If a loan payment is more than 30 days past due, the payment will be reported as late on your credit report, and could negatively impact your credit score.”


  5. Why is it that every time that they take $25 out of my card monthly, the next month my money has decreased?


    • Hi Louis,

      Just to clarify, you’re saying that Self is deducting the $25 per month account price from your current card funds? If so, that is the reason your monthly balance is decreasing.


Any thoughts or questions? Comment below!

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