Credit Strong – A Good Option For Credit Building

Credit Strong – A Good Option For Credit Building

January 6, 2021         Written By Tracy Farnsworth

Think about it. You are a recent college graduate with a new job, but you have nothing other than student loans on your credit report. You don’t have years of employment history with one job, just this debt looming over your head. Until you’ve made regular payments on those loans, your score is not going to increase.

Or maybe you lost your job, got a divorce, or ran into high medical bills that wrecked your credit. Your credit score is low and this has led to a new range of problems.

If you apply for a credit card, car loan, etc., your application gets scrutinized. Whether it’s approved or denied, the hard pull of your credit report lowers your credit score by a marginal amount. One or two hard pulls won’t damage your score too much. Most pulls drop your score by up to five points. If you apply to four or five different credit card companies, your score will drop by up to 25 points. That’s a tremendous hit when you already have a low credit score.

Having no credit or a poor credit history makes it incredibly hard to get fair treatment when it comes to everything from rent to credit card terms. If you don’t have a score in the 700 or 800s, you almost have to expect higher interest rates and fees. In some areas, your credit score may also drive up certain insurance premiums or impact whether you land a job or not. A Credit Strong Credit Builder Account may be a good solution for people in this position.

How Does Credit Strong Help Build Credit?

Why choose a Credit Strong Credit Builder Account? There’s one big reason to make this your first choice. There is no credit check, so there’s no score-lowering hard pull of your credit. You make monthly payments that go toward a savings account for yourself. Each payment is reported to the three major credit bureaus, which boosts your score over time. It’s a great option for credit building. Here’s how it works.

  1. Apply online
  2. Choose the product that fits your needs
  3. Make monthly payments that are deposited to your locked savings account
  4. Credit Strong reports your monthly payments to Equifax, Experian, and TransUnion
  5. Check your credit report each month to see the improvement
  6. Continue making payments each month as agreed
  7. Have your funds unlocked when you make the final payment
  8. Unlocked funds are yours to do with what you will

Applying for a Credit Builder Account

It takes just a few minutes to fill out the application and get approved. You’re not waiting for underwriters to scour your credit report and run the numbers. You share your name, contact information, type of product that interests you, debit card or checking account information, and Social Security number.

It’s very unlikely that your application will be denied. If this does occur, it is likely one of two things. First, you may already have two Credit Strong accounts. Second, the bank cannot verify your identity. Make sure your information is correct and that you haven’t signed up twice already.

Once the account is set, a Credit Strong Credit Builder Account creates an FDIC-insured account with Austin Capital Bank. The payments you make are divided to cover the fees you agreed to when you applied and your savings account. While you’re in the payment stage of your credit builder loan, the account is locked. Funds are unlocked when you make your final payment or ask to cancel your agreement.

You have to pay on time. If you miss a payment to Credit Strong, it does get reported as a late payment. That will hurt your credit history. If something happens and you cannot make the payment, you should contact the bank as soon as possible.

Choose From Three Types of Credit Strong Accounts

There are three types of credit builder accounts. They do work in the same general manner. You apply and have Credit Strong open an FDIC insured account in your name. You make payments and start building your savings over time. The funds are locked until you cancel your plan or make the final payment.

At that point, you can withdraw the amount or keep it with Austin Capital Bank. Here are the pros and cons of each product.

Subscribe Plans

Subscribe Plans let you choose your payment terms. You can spend as little as $15 for a $1,000 account or $30 for a $2,500 account. When you sign up for this plan, you make monthly payments, build up your savings, and can cancel at any time without a penalty. Your monthly payments are reported to the three agencies each month. You also get free access to your credit score where you can view your progress.

Pros:

  • No credit check
  • No security deposit
  • Cancel at any time without a fee

Cons:

  • Requires a cell phone or Google Voice account for SMS messages
  • Not available in North Carolina, Vermont, or Wisconsin
  • Must have a debit or checking account

Build and Save Plans

Build and Save accounts have terms of 12 or 24 months. The payments are higher, but you build your savings faster. There are three Build and Save plans: Build and Save 1000 for 12 months ($89 a month), Build and Save 1000 for 24 months ($48 a month), or Build and Save 2000 for 24 months ($96 a month).

Pros:

  • Build up your savings in a hurry
  • Reported to all three credit bureaus
  • No penalties if you cancel early

Cons:

  • Requires a cell phone or Google Voice
  • Higher payments
  • Not available in North Carolina, Vermont, or Wisconsin
  • A year (12 months) may not build as much of a credit history as you want

MAGNUM Plans

MAGNUM Plans can have even higher payments, but you have up to 10 years to repay the loan. It helps you develop a strong history with Credit Strong. The savings account balance after you make the last payment is much higher and can be used for business reasons. The three plans are MAGNUM 4500, MAGNUM 9000, or MAGNUM 18000. For a payment of $49.50, you save up $4,500. For a payment of $99, you save up $9,000. Finally, a payment of $198 helps you save up $18,000.

Pros:

  • Shows that you’re responsible for larger loan amounts
  • Cancel at any time without penalty
  • Allows you to choose the length of your repayment terms

Cons:

  • Highest payments
  • Not available in North Carolina, Vermont, or Wisconsin
  • Must have Google Voice or a cell phone

Pair Credit Strong Credit Builder Accounts With Other Positive Steps

Your credit score is based on several factors. Making payments on time as promised is the most important. How long you’ve had your account with a company counts, as do the types of credit you have and what balance you carry on the cards. 

A Credit Strong Credit Builder Account can help you build positive scores with making payments on time and how long you’ve held the account. Once you apply and are improved, it takes up to 60 days for the first payment to appear on your credit report.

How long does it take to see your credit score increase? Scores do vary from day to day, so don’t panic if you notice your score has dipped a small amount after you’ve purchased something with a card or until your payment is added to your credit report. It also depends on why your score is low. These are general guidelines that can help you.

Typically, you should see improvements within a few months. People with no credit history should see their score improving within half a year.

If you have a bankruptcy, foreclosure, or car repossession on your record, it can take several years to recover from that damage. It takes seven years for late payments, foreclosures, debt collection, and some bankruptcies to leave your credit report. A chapter 7 bankruptcy can take up to a decade to disappear. If you have that type of information on your credit report, don’t let it get you down. You just need to take baby steps to start making positive changes.

In addition to keeping up with your Credit Strong payments, make sure you keep up with payments on your other loans like credit card payments and student loans. Do not let those slide as that will impact the positive steps you’re taking through Credit Strong.

Each timely payment you make helps you build a better credit history. Set up a Credit Strong Credit Builder Account and take a positive step toward better credit.

The information contained within this article was accurate as of January 6, 2021. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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tracy

About Tracy Farnsworth

Tracy Farnsworth went straight from a business track in high school to a full-time job in mortgage banking in Burlington, Vermont. After having children, she built a freelance career in content writing and took online classes as time allowed. She completed Social Media Marketing and Digital Marketing certificate programs with Ireland's online Shaw Academy and completed several courses in SEO and analytics. In her free time, she's the “mom” to a very clingy rat terrier, and the pair walk at least a mile every day. She's also a novice baker who is trying to master the art of sourdough bread.