Self Credit Builder: How It Works
A credit-builder loan from Self can help your credit profile through on-time loan payments.
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Updated · 2 min read
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Contributing Writer If you have no credit history or are rebuilding your credit, qualifying for a credit card or loan isn't easy.
You could try a secured credit card, but you typically have to have money for the deposit. A credit-builder loan offers consumers a chance to build credit — or rebuild credit — without requiring as much money upfront.
With a credit-builder loan, the amount you borrow doesn't come to you right away. Instead, the borrowed funds are held in a certificate of deposit or savings account for a specified loan term. Once you've repaid the loan plus interest, you receive the held money.
Self offers a credit-builder loan to U.S. residents in all 50 states. Here's what to know.
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How Self — formerly Self Lender — works
Once Self approves a loan application, the loan amount is deposited in a certificate of deposit with one of its FDIC-insured partner banks. You’ll make monthly payments over the loan term. After all payments are made, you get access to the money minus fees and interest.
Self offers two-year terms for four different monthly payment options. The lowest payment is $25 a month; you can also choose payments of $35, $48 or $150 per month. Check self.inc/pricing for the most recent pricing options.
Self reports your payments to the three major credit bureaus, Equifax, Experian and TransUnion. Any late payments will hurt the credit you’re trying to build. After about six months, your repayment activity should generate a FICO score if you didn’t already have one; your VantageScore can be generated sooner.
During the repayment period, you have access to free credit monitoring and a VantageScore so you can track your credit score’s progress. You can also keep an eye on your credit with a free credit score and TransUnion credit report from NerdWallet.
How to qualify for a credit-builder loan with Self
The loan application is submitted online. To qualify, you must:
- Be at least 18 years old.
- Be a permanent U.S. resident.
- Have a Social Security number.
- Have either a bank account or debit card; a prepaid card is OK.
Self fees and penalties
Payments 15 days late or more incur a fee of up to 5% of the scheduled monthly payment. Payments that are 30 days or more past the due date will be reported to the credit bureaus, likely damaging your score.
If the account continues to be late, it will eventually be closed and the loan will be reported as "defaulted" on your credit reports. A default also damages your credit.
Self secured credit card
Self also offers a Visa credit card secured by money you have paid on your Self loan account. To qualify, you must have made at least $100 worth of payments on your credit-builder loan.
There's no hard credit inquiry, and — like the loan — the secured card reports your payments to the three major credit bureaus.
That gives you two types of credit: revolving (the credit card) and installment (the loan). That could help build credit faster because the scoring formulas reward consumers for handling different types of credit responsibly.
Credit-builder loans vs. secured cards
A credit-builder loan is different from a secured credit card in two important ways:
- You don’t need money upfront to get the loan. With a secured card, you typically have to pay a deposit upfront, and that amount is generally your credit limit.
- You cannot access the money on deposit until the loan is paid off. With a secured card, you can use up to your credit limit anytime — though doing so will increase your credit utilization and hurt your credit until the balance is low again.
Disclosure from Self
Sample product: $25/mo, 24 mos, 15.92% APR; $35/mo, 24 mos, 15.69% APR; $48/mo, 24 mos, 15.51% APR; $150/mo, 24 mos, 15.82% APR. See self.inc/pricing. Credit Builder Accounts & Certificates of Deposit made/held by Lead Bank, Sunrise Banks, N.A., First Century Bank, N.A., each Member FDIC. Subject to credit approval.
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- 1. Federal Reserve Bank of St. Louis. Finance Rate on Personal Loans at Commercial Banks, 24 Month Loan. Accessed May 23, 2025.
- 2. Experian and Oliver Wyman. Financial Inclusion and Access to Credit. Accessed Jan 23, 2025.
- 3. National Credit Union Administration. Credit Union and Bank Rates 2024 Q4. Accessed May 23, 2025.
- 4. Consumer Financial Protection Bureau. Consumer Use of Buy Now, Pay Later and Other Unsecured Debt. Accessed Jan 24, 2025.
- 4. Consumer Financial Protection Bureau. Consumer Use of Buy Now, Pay Later and Other Unsecured Debt. Accessed Jan 27, 2025.
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