Summary of "This Credit Builder App Could Be WORTH IT"
Main Financial Strategies:
- Credit Building Loans: Ava offers small loans (between $25 to $100 per month) for 12 or 24 months, which are reported to major credit bureaus to help build credit history.
- Credit Builder Card: Users can utilize a credit card for subscriptions (e.g., Amazon Prime, Netflix) that also reports payments to credit bureaus, promoting responsible credit usage.
- Rent Reporting: The app allows users to report on-time rent payments to credit bureaus, further aiding credit score improvement.
Methodology/Step-by-Step Guide:
- Loan Setup: Choose a loan amount ($25-$100) and term (12 or 24 months).
- Payment Reporting: Ava reports on-time payments to TransUnion, Equifax, and Experian every 24 hours.
- Credit Builder Card Usage: Use the card for subscriptions; payments will be reported to credit bureaus.
- Bank Account Linking: Connect a bank account for rent payment verification and to monitor credit utilization.
- Subscription Cost: Choose between an annual subscription ($6/month) or a month-to-month option ($9/month).
Pros and Cons:
- Pros:
- Fast credit building with frequent reporting.
- No credit check required to start.
- Low monthly payments with zero interest and fees.
- Rent payments can enhance credit history.
- Cons:
- Not free; requires a subscription.
- Limited features beyond credit building.
- Spending limits on the credit card do not match the credit limit.
- Requires consistent payments for at least a year.
Ideal Users:
- Individuals building credit for the first time.
- Those looking to rebuild poor or fair credit.
- Users not ready for a traditional credit card.
Conclusion:
Ava is positioned as a valuable tool for those needing to improve their credit scores, especially for users comfortable with the subscription cost. The video emphasizes the importance of good financial habits alongside using credit-building tools.
Presenters/Sources:
- Justine (host of the channel).
Category
Business and Finance
