The hardest part about building a credit history is getting access to credit in the first place.

If becoming an authorized user on someone else’s credit card isn't an option for you or you can't afford the deposit on a secured card, Kikoff offers a cheap and simple way to build credit.

The San Francisco-based online lender gives you access to a $500 revolving line of credit that you can use to build a credit history. It's like a credit card, the company's website says, but without interest or fees. You can use the line of credit to make purchases solely on Kikoff's online store. The company reports payments to two credit bureaus and users get access to VantageScore credit scores to track their progress.

Kikoff says there’s no credit check involved and no need to link a bank account. The credit-building products will always be interest-free and fee-free, says Cynthia Chen, Kikoff’s co-founder and CEO. Chen says she started Kikoff because she wanted to “do something mission-driven that could potentially change the financial lives of millions of people.”

If you already have credit but need to build it after some missteps, Kikoff is one of several options you can explore. Here’s a summary of the Kikoff line of credit.

How a Kikoff line of credit works 

Kikoff offers a $500 revolving line of credit to all applicants. There's no credit check involved, and $500 is the only amount you can get.

There are limitations: You cannot access the money through a check or other method; you can only use the credit limit to make purchases on Kikoff's online store. Think of it as a payment option at checkout, Chen says. The Kikoff store contains e-books on personal finance, wellness and other topics for purchase. The selections are priced at $10 or $20, and payments are as low as $2 per month. (NerdWallet's advice: If you go this route, choose a $10 purchase, and pay it off in 5 months; then revisit and decide if the impact on your credit score makes it worth continuing.)

Kikoff used to offer a $12 credit-builder loan that you paid back in 12 monthly installments of $1 each. The loan is no longer available to new applicants. Existing customers with an outstanding loan have three choices: continue the monthly payments; pay the loan off and switch to the revolving line of credit; or keep the loan and add the line of credit.

The revolving line of credit shows up like a credit card account would on your credit reports. Payments are reported to Experian and Equifax credit bureaus, Chen says. That helps build your credit history. Your scores are calculated from information in your credit reports. Chen says that people who chose the loan option and were new to credit typically established a VantageScore 3.0 within 30 days and a FICO score within six months. Data is not yet available for new-credit users of the line of credit.

The most important factors affecting your score are making on-time payments, followed by how much of your revolving credit limits you use, known as your credit utilization. Chen says Kikoff teaches people to keep an eye on their credit utilization through their online accounts. Payment is due every month, and you can make payments using a debit or credit card. Kikoff sends you a reminder when payment is due.

Kikoff also gives borrowers access to a free VantageScore from Equifax to track their progress. You can also use NerdWallet to track your free VantageScore from TransUnion and see your credit report on a weekly basis.

Kikoff fees and penalties

Unlike a traditional credit card, Kikoff's line of credit does not carry any interest. If you do not pay off the monthly balance or pay just the minimum, you won't accrue interest.

As with any other form of credit, paying late or missing a payment can hurt your scores. Normally, paying a bill 30 or more days late can seriously damage your credit and you may have to pay a late fee to your lender.

Kikoff doesn't currently charge a late fee, but if someone becomes delinquent on their payments, the line of credit can be frozen, Chen says.

How to apply for a Kikoff line of credit

You can apply on Kikoff’s website by providing personal details such as your name, phone number, address and Social Security number.

There is no credit check involved and you don't need to provide access to your bank information. Once your identity has been verified and you are approved, you can view your credit limit balance, track your credit score, utilization and payment date through your online account.

Kikoff vs. Self

Self is a lender that offers credit-builder loans as well as a secured credit card to help people establish credit. Self is available in all 50 states; Kikoff doesn't lend in Delaware, Indiana, Nevada, North Dakota or Rhode Island.

Self isn't free; you have to pay an administrative fee for its credit-builder loan as well as a finance charge. Self offers loans starting at $600 and going up to $1,800.

Unlike Kikoff, you don't have access to the full amount immediately. Instead, Self places the money in a certificate of deposit account and releases it to you when you finish making monthly payments for the loan term. You can use the loan to establish credit and build savings at the same time.

You can pay your loan back early at both lenders or close your credit account at Kikoff if you have established a good credit score and are ready to apply for traditional loans or credit cards. Since Kikoff offers a revolving line of credit at no cost, keeping the line open (but hardly using it) after you have graduated to other credit products may benefit your credit history.

Other ways to build credit