Building your credit is easier than you think! It starts with knowing and understanding your score, creating goals, and then monitoring your credit as you take steps to build it.
With Credit Builder Plus, we help you monitor your credit and build it. You can check your credit score monitoring dashboard — powered by TransUnion — in the app or online anytime!
You’ll be able to view your key credit score factors like credit utilization and credit age, as well as your credit socre history, so you can know where to focus and what factors are helping your score.
Credit Builder Plus members also get helpful credit alerts and credit summary emails to help you track your credit score and understand how to keep building it.
At first, it can seem like the number that represents your credit score is arbitrary or difficult to figure out. But actually, it’s pretty simple. Your credit score is made up of five factors:
MoneyLion helps you monitor each credit score factor!
This one’s the most important one — it makes up 35% of how your score is calculated, according to FICO. Paying your bills on time is the most effective way to establish a good credit history. And our Credit Builder Plus Loan does just that — it lets you take out a loan up to $1,000 at a competitive APR and build your credit history as you pay it back by reporting your payments to all three credit bureaus.
A good way to think about credit utilization is comparing how much credit you have available (think credit card limits) to how much credit you’ve used. Utilization makes up about 30% of how your credit is calculated. Your credit utilization is a ratio, and the more credit you’ve used, the higher your credit utilization ratio will be. A lower ratio (30% or less) can lead to a higher score, because it indicates responsible borrowing.
The age of your credit isn’t just the amount of time you’ve had an established credit history. It’s actually the average age of all of your credit accounts (credit cards, student loans, car loans, mortgages) — and it makes up 10 – 15% of how your credit is calculated. Typically, a higher credit age is better for your score because it shows a longer history of borrowing.
The different kinds of credit you have, or your credit mix, is also a factor in determining your credit score. It’s best to have a mix of loan types — especially those with a set number of equal payments, such as installment loans, credit builder loans, car payments or mortgages — and credit card accounts. By having a mix of credit, you are showing that you have a history of obtaining and managing different types of credit.
When a lender “checks credit” to determine your credit worthiness, they are making a credit inquiry. And some credit inquiries affect your credit negatively (hard credit checks), and some don’t affect your score (soft checks). Often when you are applying for a credit card, a car loan, or a mortgage, a hard credit check is performed, and on average, it can lower your score 5-10 points. We use soft checks to monitor your score.
Sign up for MoneyLion and apply for a Credit Builder Plus membership to access a credit builder loan up to $1,000 and other membership benefits.
With your loan, you’ll receive a portion of your funds now and the rest will be saved for you in a Credit Reserve account in your name — it’s a great way to save while you build credit.
You’ll get those savings about 10 days after you pay back your loan in full to spend on whatever you want!
We report your loan payments to all three credit bureaus each month, and we make it easy to pay on time by automating your payments based on your pay cycle and working with you if you’re a few days late. The key to credit building is on-time payments!
Reporting your payments helps you establish a positive payment history. And it works, as most members raise their score by 60 points within 60 days of taking their Credit Builder Loan*.
This is the fun and motivating part! As you make on-time loan payments, you’ll get weekly credit score updates in the MoneyLion app — so you can track your progress as you establish a positive payment history during the 12-month term of your credit builder loan!
We’ll also send you helpful insights to make credit tracking easier. And now you know how credit score growth works at MoneyLion!