If you have bad credit, you probably already know how hard it is to build your credit score up. Building your credit score can be a Catch-22, which according to the Merriam-Webster dictionary, is “an illogical, unreasonable, or senseless situation.”
To get approved for the loans and credit cards that help build your credit score, you need to have a good credit score to begin with. If you have a bad score, you oftentimes can’t have access to the debt that helps you with building credit. People that need the most help with their credit are the ones who can’t get it! Sounds pretty illogical, unreasonable, and senseless right?
To help with this, companies like Credit Strong have created a product that helps build your credit profile and is available to people with bad credit scores. Curious about credit strong reviews? Let’s dive into who Credit Strong is and how their product works.
Credit Strong is a finance technology or “fintech” division of a bank called Austin Capital Bank. Austin Capital Bank is a community bank that was founded in 2006. This bank serves communities in Texas and has been highly rated as one of the fastest growing, top performing banking institutions in Texas.
While Austin Capital Bank serves the greater Texas community with its banking services, Credit Strong operates all across the country in every state besides Vermont, Wisconsin, and North Carolina.
With the support of a large bank behind it, Credit Strong is able to provide “loans” to people all across the country. These “loans” are meant to help customers with bad credit scores be able to build up their payment history so they can have a better credit score. Along with this, they are an FDIC insured company, meaning that your money and your financial information is extremely secure with Credit Strong.
Overall, Credit Strong is a very interesting and innovative company that has a great solution to this Catch-22 of credit building we discussed earlier. Let’s take a look at what exactly Credit Strong offers.
Credit Strong offers something they like to call a “credit builder loan.” Credit Strong claims that paying back these “loans” is a great way to build your credit score up, especially if you have a bad credit score.
However, Credit Strong is not your typical loan provider. In fact, the loans that Credit Strong offers are really not even loans in the first place. This can be confusing and slightly misleading, but we will clear the air for you.
Credit Strong offers a credit builder loan that helps to build your credit score, but doesn’t exactly provide you with money like a typical loan does. Instead, a “loan” is deposited into a savings account for you and you make “payments” on this loan by depositing money into the savings account. Once this “loan” is paid off, the money you have put into that savings account is given back to you.
Still confused? Keep reading and we will dive into this further.
When you first open a credit strong account and apply for a credit builder loan, Credit Strong does not check your credit. This means that you can get their loan even with poor credit, and that your credit score won’t drop because of a hard inquiry.
Once your loan application is approved, Credit Strong deposits your loan amount into a savings account. This savings account is then locked and you cannot access your loan amount. Like a typical savings account, this savings account earns a fixed interest rate. Credit Strong’s savings account interest rate is .01%, which is fairly low.
Every month, you make a loan payment which includes your principal payment along with interest. The principal payment is deposited into the savings account while Credit Strong gets the interest payment (this is how they make money). Credit Strong then reports this successful payment to the three major credit bureaus, Equifax, Experian, and TransUnion. This helps to build your payment history, which improves your overall credit score after some time.
After you have completely paid off your loan, the amount in the previously locked savings account is released (along with the interest you earned on the savings account). You can then decide to leave your money in this savings account with Credit Strong, or you can transfer the funds to a different account.
Credit Strong has a variety of loans that vary in loan amount and in loan term. Loans like “subscribe 1,000” and “subscribe 2,000” are loans worth $1,000 and $2,000 respectively, and can last up to 10 years. Loans like “build and save” 1,000 and 2,000 last for 2 years. The “Magnum” 5,000 and 10,000 loans are worth $5,000 and $10,000 and can last up to 10 years. The loan you get will end up determining your monthly payment as well as how much it impacts your credit score.
With Credit Strong, your payment history (which makes up 35% of your total credit score) is improved with every payment you make. With a Credit Strong credit builder loan, your credit score is almost sure to increase. However, the amount your credit score increases is up to a few different things.
First, the amount your credit score increases depends on your current credit situation. If you have 10 years of bad credit habits on your account, your score may not increase as much as if you only have a few mistakes on your credit report.
Second, the extent to which your score increases from a Credit Strong long depends on which loan you get with Credit Strong. If you get a “build and save 1,000” loan with Credit Strong that is paid off in 2 years, you will not magically have an excellent credit score. For example, your credit score will not increase as much as a “Magnum 10,000” loan that is much bigger and takes 10 years worth of payments to pay off.
While there is no way to know exactly how much your score will increase with a Credit Strong credit builder loan, you can know that it will only help your credit score as long as you consistently make payments.
We now understand what Credit Strong is and what they can offer you, but should you get a Credit Strong credit builder loan? Let’s look at the pros and cons of one of the seloans so you can make an informed decision yourself!
Credit Strong’s initial pricing starts at $15 per month and expands all the way to $110 per month and you can customize your payment terms up to 120 months. The best part is you can cancel at any time with no penalty. When signing up for Credit Strong we recommend linking your checking account in order to avoid convenience fees that are associated with debit and prepaid cards. Your payments are due on payment dates, but Credit Strong does provide a 14-day grace period, but if the loan is past due by 15 days your account will be assessed a late fee. If you are 30 days late your account will be reported to the credit bureaus and it will hurt your credit score. If for whatever reason you can’t make the monthly payments anymore you can terminate your Credit Strong account with no prepayment required or termination fee.
Many people are worried that they won’t meet the minimum income required to open a Credit Strong account but rest assured there is no minimum income number required. Credit Strong also doesn’t look at your credit score. What is required to open up a Credit Strong account are the following requirements:
If you meet these eligibility requirements you’ll want to verify that Credit Strong is available in your state. The only states where Credit Strong is not allowed to offer financial services are North Carolina, Wisconsin, and Vermont.
Here at Possible Finance, we have a product that combines some of the best aspects of Credit Strong’s product while doing away with many of its negative aspects. Similar to Credit Strong, we call our product the credit builder loan.
Our loans are for $500 and less, and no credit check is done when we look at your loan application. This means that whatever your credit score is, you can get one of our loans to help you build credit history.
So how exactly does it work? After downloading the Possible Finance app you’ll have the ability to borrow up to $500 and you can get this cash in minutes. This financial service has a lower APR (annual percentage rate) than traditional payday loans and it doesn't matter how bad your credit is. There is never a credit check and unlike payday loans, the Possible Finance credit builder loan improves your credit. Every time you repay your Possible loan on time our team of financial professionals reports these payments to Experian & TransUnion, the result is an improvement in your credit score. 35% of your FICO credit score is based on credit payment history and Possible Finance empowers consumers to build a strong payment history. If the unexpected happens and you can’t make one of our loans, we’ll extend payment for up to 29 days with no extra fee.
Compared to payday loans of a similar size that require you to pay back your expensive loan in one week, our loans are installment loans (Related: Payday Loans vs Installment Loans). This means that you pay our loans back over the course of 4 payments. If you are struggling with one of your payments, you can extend your payment up to 29 days right within the app.
As you make payments, we report to Experian and TransUnion. This means that with every successful payment, your credit history is further built. Over time, this helps to increase your credit score.
Here at Possible, we know that credit is a Catch-22, and we know that companies like Credit Strong sometimes do not have what it takes to meet your needs. We created a product that is both beneficial for our customers and helps to build value for them as well.
Interested in getting a loan with Possible? Download our app today and get started!