Building or improving credit can be overwhelming.
There are so many different ways to go about building your credit profile and so many steps to take. However, decent credit is a vital necessity in life. Without good credit, you may not be eligible for the financing you need for cars, housing, or other necessities.
Poor credit is even a barrier to certain jobs. If you’re looking to improve your credit score, you’re likely hoping to overhaul your relationship with money overall. A healthy financial situation means not only having a good credit score but also having money tucked away in savings. This is where Credit Strong may be able to help.
You never know what an unexpected expense might pop up, and without savings, one emergency can tank all of the work you’ve done to improve your financial standing.
In this article, we’ll discuss one option for improving your credit score that comes with the added bonus of helping build up your savings.
Let’s dig into Credit Strong, so you can decide if this credit-building tool is a solid option for you.
What is Credit Strong?
Credit Strong is a credit-builder loan service as a division of Austin Capital Bank in Texas. In addition to running a bank in Texas, this company also has Credit Strong, which is available across the country (there are only a few states where the service isn’t available). Via Credit Strong, customers can improve their credit score while saving money.
Because a bank operates Credit Strong, it’s a credit builder service that is considered quite reputable and trustworthy. Austin Capital Bank has a great reputation and is one of the fastest-growing and highly rated financial institution in the state of Texas.
How Does Credit Strong Work?
Credit Strong gives customers a type of loan called an installment loan. An installment loan means that customers pay it off in installments rather than paying off revolving debt, as one would with a credit card.
One difference separates Credit Strong from a traditional loan or personal loan: you don’t receive any of the loan proceeds until the end of your repayment term. Usually, with installment loans, customers receive the loan right away. So if you’re considering Credit Strong because you need cash in hand: don’t.
Credit Strong is a way to improve your credit score while accumulating some savings. Unfortunately, it’s not a way to get funds in an emergency.
Many of the negative reviews for Credit Strong come from customers who didn’t understand this before signing up.
Customers can choose to have their loans structured in several different ways. Once you sign up for a loan, the money is put into a locked savings account. Then, you make loan payments every month, which is reported to all three major credit bureaus. If payments are made on time every month, this will result in a higher credit score.
Once the loan is paid off, the customer receives all of the principle.
Customers will also pay interest and non-refundable administrative fee on top of the principle, and they do not receive that money on the day of payout. That’s the money that Credit Strong is charging to help you build credit and savings.
In many ways, this system is a lot like a secured credit card: you put money down, and then you get your own money back via a credit line with a secured credit card or via a savings account with Credit Strong.
While a secured credit card may end up costing less in interest rate charges and fees (depending on which card you choose), what a secured credit card won’t do is add installment credit to your credit history.
There are a few different types of credit that you need a good history of managing if you want your credit score to rise significantly. There is revolving credit, open credit, and installment credit. Revolving credit is when you continually borrow and then repay an account.
A credit card would be an example of revolving credit. Open credit is a type of credit that is paid in full each month, but monthly payments vary.
A good example of this would be a utility bill. Lastly, there’s installment credit. This is usually a loan that is paid back in installments.
While a positive payment history and a low credit utilization rate are most important, a variety of credit types is also a factor in calculating your credit score. Lenders want to see that you can use different types of credit responsibly. For this reason, a Credit Strong installment loan may be a good option if you already have revolving credit that you are using responsibly.
Credit Strong Programs
| Subscribe | Subscribe | Build and Save | Build and Save | Build and Save | MAGNUM | MAGNUM | |
|---|---|---|---|---|---|---|---|
| Monthly Payments | $15 | $15 | $48 | $89 | $96 | $55 | $110 |
| APR | 13.5% | 7.25% | 14.04% | 14.89% | 14.43% | 5.907% | 5.851% |
| Admin Fee | $15 | $15 | $8.95 | $8.95 | $8.95 | $25 | $25 |
| Amount Reported | $1,000 | $2,500 | $1,000 | $1,000 | $2,000 | $5,000 | $10,000 |
| Repayment Term | Up to 10 Years | Up to 10 Years | 12 Months | 24 Months | 24 Months | Up to 10 Years | Up to 10 Years |
Credit Strong Eligibility
Before you beginning the loan application, it’s important to understand the requirements. To apply for Credit Strong account, you must meet the following requirements:
- Be at least 18 years old
- Have a Social Security Number
- Have a U.S. mailing address
- Have an email address
- Not be currently enrolled in bankruptcy proceedings
How Much Will Credit Strong Improve My Credit?
So how much will your credit score increase? This depends on a variety of factors, the most important being: how do you use Credit Strong? If you make all of your payments on time, you’re likely to see your score improve. However, your credit score will be negatively impacted if you miss or are late on payments.
If you make all the payments on time, the positive behavior will be reported to the three credit bureaus.
While Credit Strong can make no guarantees about how much your score will be improved, they can share the data they’ve collected to give you an idea of their efficacy. For example, Credit Strong collected data on 50,000 of their customers and found that, on average, customers saw a 25-point increase to their FICO score after three months, an increase of almost 40 points after nine months, and just under 70 points increase after a year.
Overall customer Credit Strong reviews have been positive with many experiencing a significant improvement to their bad credit score.
Credit Strong Pros and Cons
Pros of Credit Strong
- There is no hard pull credit check when you apply. Many lenders do a hard pull when you apply for a line of credit, and this causes a temporary dip in your credit score. Because you don’t receive the loan money until all of the payments are made, a hard pull isn’t necessary with Credit Strong.
- You save money while building credit. After the payments are completed, you’re given access to the principal. If you’re someone who has trouble saving money and you’re only just starting to learn responsible fiscal habits, this bit of help tucking money away could be just the motivation you need to get serious about your finances.
- An actual bank operates Credit Strong. This means that your money is held with bank-level security and insured by the FDIC.
- You can cancel anytime with no penalty. Credit Strong doesn’t charge any cancelation fee. However, it’s important to note that you will only be refunded the money that was put towards the principal balance of the loan. Any money put towards fees or interest will be kept by Credit Strong. The first few payments mostly go towards fees and interest, so if you cancel early on in the loan, you will likely only be refunded a small portion of what you paid.
- There are several different options for loans. You can choose between loans of varying lengths and terms, depending on what your needs are.
- Credit Strong is a good option if you need installment credit in your credit history. Variety in types of credit is one of the factors that determine your credit score.
Cons of Credit Strong
- It can be costly. Credit Strong can be pricier than secured credit if you don’t have a specific need for installment credit. Only a portion of what you pay goes towards the loan principal, and over the duration of the loan, you’ll end up paying a significant amount in interest payments and a admin fee.
- You don’t get the loan until you’re done making payments. This is a good thing if you want to save money, but if you need the loan right away, Credit Strong won’t be the best choice for you.
- You risk harming your credit score if you miss a payment. If you’re still struggling with your finances and money management, you may want to opt for a credit builder account that only reports positive credit behavior to the credit bureaus and doesn’t report negative behavior. There are a few credit builder services out there that will do exactly this and come with no risk of further credit damage.
Is Credit Strong Worth It?
Whether or not Credit Strong is a worthwhile option for you will depend on a variety of factors.
But if you need to build credit from scratch or improve a low credit score, you’d like help saving money, and you specifically need installment credit to add variety to your credit history, then Credit Strong may be a solid choice for you.
Just remember to consider all your options and make sure you can commit to faithfully making payments on time each month before signing up for any type of loan, credit builder account, or credit card.
Wrapping It Up
Credit Strong lends a type of installment loan that customers can’t touch until the loan is completely paid off. They report to all three credit bureaus, so as long as all payments are made on time, customers have a good chance of improving their credit score while also storing away money for a rainy day.
A higher credit score and six months worth of expenses tucked away are a great foundation for a healthy financial future. If you’re interested in improving your credit, consider getting a Credit Strong loan specifically designed to increase your credit. With flexibility in their services such as loan amount and monthly payment, you can find a loan that works within your budget.
We recommend Credit Strong for those who have bad credit and are in need of help to improve their credit score as your credit report will show consistent payment monthly.
Credit Strong is a great option if you need installment credit in your credit history. Variety in types of credit is one of the factors that determine your credit score. By doing so, you’ll build out your credit profile that traditional lenders look for.
