This is an in-depth review of Self (formerly known as Self Lender).

In this up-to-date review, we’ll break down:

• Who Self is
• How the Self credit builder loan works
• How much Self costs
• Things we like
• Things we don’t like
• How to open a Self account
• Lots more

Let’s get started.

What is Self?

Self is a fin-tech (financial technology) company that offers credit builder loans to people looking to improve their credit and build their credit history.

A credit-builder loan is a small loan taken out in your name, but instead of the funds being released immediately to you, Self holds onto it by placing your money into a CD (certificate of deposit) in the form of a secured loan, and the giving you the money at the end of the loan term.

As you pay off the loan each month, your payment history gets reported to the credit reporting agencies, which in turn helps build your credit score (payment history accounts for 35% of your total credit score).

At the end of the loan term, after you’ve paid it off in full, your principal unlocks and (minus the interest of the loan) is paid back to you.

Effectively, you can rebuild your bad credit without having to take out an additional loan or line of credit because Self allows you to basically loan money out to yourself.

Is Self legitimate?

Yes, Self is a legitimate company. They’ve helped thousands of customers rebuild their credit, and they are backed by some big-name investors. 

You can read more about Self’s mission and its leadership team here.

How does Self work?

Self works in four easy steps:

• Apply for a credit-builder account
• Pay off your credit builder account
• Self reports your on-time payments to the credit bureaus
• Your payments are released back to you

1. Apply for a credit builder account

Once you sign up with Self, they will open a certificate of deposit (CD) account in your name (this CD will be opened with Sunrise Bank, Lead Bank, or Atlantic Capital Bank, and is FDIC-insured).

The only requirements are that you are at least 18 years old, are a permanent U.S. resident, and have a valid social security number and bank account (or debit card). They don’t guarantee approval, but their approval rating is very high.

2. Pay off your credit builder account

One of the most unique things about Self is that you choose your loan term and your payment amount.

You can choose to pay $25, $35, $48, or $150 per month. And you can choose to pay it off in either 12 or 24 months, depending on the payment amount you choose.

They do charge a one-time activation fee when you set up your account, but it’s very small, ranging from $9 to $15.

The APRs do not exceed 16%, according to the company. Please refer to self.inc/pricing for the most recent pricing options.

3. On-time payments reported to credit bureaus

Self reports your payments to the three major credit bureaus, Experian, Equifax, and TransUnion. But do note: any late payments will hurt the credit you are trying to build, so be sure to make your payments on time, every month.

After about six months of payment activity, FICO should generate a credit score for you, if you didn’t already have one.

4. Getting your money

At the end of your loan term, Self will automatically deposit your accumulated funds into your bank account on file.

They say it usually takes about 10-14 business days for the loan amount to show up in your account. 

Self features and benefits

1. Build and improve your credit

The main benefit of using Self is the chance to repair your credit score. 

Since all your on-time payments are reported to the three major credit bureaus, your credit score will increase over time. (Payment history is the most important factor when determining your FICO score).

2. Forced savings

Since you are making payments into a CD, you are effectively creating a forced savings plan for yourself. Once you have made all your loan payments, the money in the CD is returned back to you (minus any fees).

3. Credit scores and credit monitoring

With your Self dashboard, you’re able to log on any time to check your credit score. You’re also provided with credit monitoring, which will help you track your progress and monitor for any changes.

How to apply for a Self loan

Applying for a loan with Self is easy.

Just click this link, enter your email, and then hit the orange “Get Started” tab on their homepage.

You’ll then be directed to a page where you’ll fill out your banking information (for automatic payment withdrawals), social security number, phone number, and address. 

Next, you’ll be asked to choose the terms of your loan.

You’ll commit to an amount of $25, $35, $48, or $150. Then you’ll just click on the “apply” button at the bottom of the page.

The whole process takes just a few minutes, and you’ll have a decision immediately.

Self loan fees and penalties

If you’re 15 days late or more with a payment, it will cost 5% of the scheduled monthly statement.

Payments 30 days past due will be reported to the credit bureaus, which can damage your score. If you continue to miss payments, they may eventually close your account and the loan will be marked as “defaulted” on your credit reports.

Bottom line: make sure you make all your payments on time.

Meanwhile, here’s an explanation of what each one of these fees & charges means:

• Non-refundable administration fee. This is the fee you’ll pay when you open your account. And as you can see from the charts, it varies from $12-$15, depending on the amount of your loan.
• Interest & APR: The interest rate is the amount of interest you’re charged, but your APR is the interest plus other fees you’ll incur. Most other lenders like credit card companies only charge APR on balances remaining past the due date. But Self Lender calculates these fees from the very beginning. 
• Finance charge. The finance charge is the total cost of borrowing—basically, the interest plus the fees.
• Late fees. Self Lender allows you a 15-day grace period past the payment due date. But if you go past that, you’ll be charged a late fee that is 5% of your monthly payment amount.

Other ways to build credit

While a credit builder loan is one of the least costly ways to build your credit, it may not be for everyone.

If you have a negative ChexSystems history, for example, Self may not approve your account. Also, if you need access to funds right away, putting money into a CD may not be the best option for you.

In any case, you might just want to explore your options, or you might want to add other types of credit to your portfolio since credit mix factors into your score.

• Secured credit cards. Secured credit cards are accounts where you make a deposit equivalent to your credit limit. Usually, you’ll get your deposit back at the end of a specified amount of time if you consistently make your payments on time.
• Store credit cards: There are some credit cards with more lenient qualification criteria, and a store card is usually one of them. 
• Authorized user. You can ask your parents or spouse to add you as an authorized user on his or her credit cards. This way, their positive credit habits will also be reflected on your report.
• Co-signer. Almost any lender will allow you to use a co-signer who meets their credit criteria.

Credit builder loans vs secured credit cards

Credit-builder loans differ from secured cards in a couple of ways. 

• You don’t need to come up with a deposit to get the loan, but you need to be able to afford the monthly payments. With a secured card, they generally require an upfront deposit, which is equal to your credit limit. 
• You can’t access your funds until you’ve paid off your loan. With a secured card, you’re able to access the amount up to your credit limit at any time.

The Self Visa® credit card

Self is now offering a Visa credit card as another way of building credit.

The card is secured by money you’ve already paid on your Self credit builder loan account.

To qualify, you must have an open credit builder account, and:

• Make 3 monthly payments on time
• Have $100 or more in savings progress
• Have your account in good standing

Self charges an annual fee of $25, which is taken out of the money you deposit when signing up for the card.

For example, if you open the card with $200, that means your credit limit will be $175. If you’d like a bigger credit limit, you can opt to make a bigger deposit.

Since you’ve already been approved as a Self customer, you’re automatically approved for the card, which means there’s no credit check required.

And like the credit builder loan, your on-time payments on the secured card get reported to the major credit reporting agencies.

So when you combine the credit builder loan with the secured credit card, you’re able to have access to two types of credit to help build your credit faster.

Final thoughts

Self credit-builder loans are a great way to build up savings, improve your credit score, and develop responsible habits.

If you have free options available to you, such as becoming an authorized user on someone else’s account, it’s wise to explore those first.

Otherwise, a credit-builder loan with Self is possibly the least expensive and easiest tool you can use to build or rebuild your credit.