Is Self Financial a Major Credit Card?

Self Financial helps individuals establish or improve their credit standing. It provides financial products designed to assist users in building a positive credit history and improving credit scores. Self aims to increase financial inclusion by offering accessible tools for credit building.

Understanding Self Credit Builder Products

Self offers distinct products designed for credit building, starting with its Credit Builder Loan. This loan functions differently from a typical loan: the borrowed funds are not received upfront. Instead, the loan amount is held in a certificate of deposit (CD) at an FDIC-insured partner bank. Users make monthly payments towards this loan over a set term. Once all payments are completed, the user receives the money held in the CD.

The Self Visa® Credit Card is another product, which is a secured credit card. This card becomes available to users after they have made a certain number of on-time payments on their credit builder loan and have accumulated a minimum of $100 in payments. The balance from the credit builder loan can serve as the security deposit for this card, meaning no additional upfront cash is necessary if loan payments have accumulated sufficiently.

How Self Impacts Your Credit

Self’s products contribute to credit improvement by reporting payment activities to the three major credit bureaus: Experian, Equifax, and TransUnion. Consistent, on-time payments for both the credit builder loan and the secured credit card are crucial, as payment history accounts for a significant portion of FICO® Scores. Any late payments can negatively affect the credit being built.

Self’s offerings can positively influence several key credit scoring factors. The credit builder loan provides an installment loan, while the secured credit card offers revolving credit. Having both an installment loan and revolving credit can improve one’s credit mix, which accounts for about 10% of a FICO® Score. This diversity shows lenders an ability to manage different types of credit responsibly.

For the secured credit card, keeping credit utilization low is important for a positive impact on credit scores. Credit utilization, the amount of credit used compared to the total available, accounts for approximately 30% of FICO® Scores. Maintaining accounts over time, such as with Self’s products, contributes to the length of credit history, a factor that makes up about 15% of a FICO® Score. A longer credit history with positive activity generally reflects greater financial responsibility to lenders.

Using Your Self Card for Purchases

The Self Visa® Credit Card operates on the Visa network, meaning it can be used anywhere Visa is accepted within the U.S. Its acceptance is similar to any other Visa credit card for transactions. The card functions like a traditional credit card for purchases.

It is important to understand that while the Self Visa® Credit Card is widely accepted, it is a secured credit card. This means it requires a security deposit, typically a minimum of $100, which often determines the credit limit. This structure differs from traditional unsecured credit cards, which do not require an upfront deposit. The credit limit on secured cards can be lower than on traditional cards, potentially impacting purchasing power. However, this secured nature does not affect its usability at point-of-sale where Visa is accepted.