If you were ask someone why they signed up for a credit building service, what would you expect the answer to be? “Increase my credit score” seems likely. It just…make sense. Given that consumer motivation, it’s interesting to see how the various credit building services position their offerings. The most common described benefit?
“Build Credit”
Nine of the dozen services in the above graphic say they build credit. Two explicitly say they will raise your credit score, and one provides a mechanistic description (“add rent, cell phone…”).
“Build credit” is a vague term, but one that hints at what they accomplish. The caution is understandable, as a firm could get in trouble for promising a credit score increase. There may be other factors impacting the consumer’s credit score.
And yet, surely there’s some credit score increase too. Why else would a consumer use a credit building service? Do credit building services work?
Turns out, many of these credit building services provide specific numbers for credit score improvements! no, they don’t lead with that on their website home pages. But they do give the consumer a sense of the scale of improvement. The nut of it is that the services do indeed work for improving scores.
The table below provides the increases touted by several different services.
| # | Credit building service | Score increase (points) | Note |
| 1 | Boom Pay | 5 – 100 | Lower scores benefit more |
| 2 | Credit Strong | 70 | 25 pts in 3 months, 75 after 12 months |
| 3 | eCredable | 48 | Has FICO below 500, adds two utilities |
| 4 | Experian Boost | 22 | For FICO scores below 580 |
| 5 | Grow Credit | 51 | After 12 months of using Grow Credit |
| 6 | Kikoff | 58 | For FICO scores below 600 |
| 7 | LevelCredit | 70 | < 600, 28 in two months, 70 pts in 2 years |
| 8 | MoneyLion | 30 | Within first 60 days |
| 9 | SeedFi | 45 | Vantage 3.0, 579 score to start, < 3 tradelines |
| 10 | Self | 32 | 12-24 months, sub 600 scores do better |
Those are some solid gains, all for using a single service. When you read the descriptions of the point increases, there are typically appropriate caveats. Because other factors can conflict with the improvements of the credit building service.
But those increases are meaningful. The table below shows the average APR of a personal loan by different credit score bands. The table below provides average personal loan APRs for the period from Jan 1, 2022 to Jul 31, 2022, via NerdWallet:
| Score band | Estimated APR |
| 300 – 629 | 25.6% |
| 630 – 689 | 19.6% |
| 690 – 719 | 15.5% |
| 720 – 850 | 10.6% |
For the target consumer, credit building services hold the promise of a meaningful reduction in interest rates. That’s real money, all for a simple credit service.
Yes, credit building services work.
Click here to find out how Scorenomics BoostMyScore® provides consumers with appropriate credit building services for their situation.
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