Today we will be reviewing a company called Credit Strong. Is Credit Strong legit? Find out in this Credit Strong review.
When it comes to debt, people seem to feel ashamed to discussing it openly. Debt is, in reality, rather common today. Loans and debts are frequently what save people’s backs, especially when commodity and utility costs keep rising.
Debts, on the other hand, might get out of control. This occurs when you don’t keep track of your expenditures. Maybe you buy things on the spur of the moment or don’t have enough money to pay your bills on time.
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Before you decide to commit to this company, you should read this Credit Strong review first. You should check if it is worth your time before you pay for it.
DISCLAIMER: This is a fully independent review. I’m not affiliated with Credit Strong in any shape or form whatsoever.
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Credit Strong: Quick Details
- Name: Credit Strong
- Website: https://www.creditstrong.com/
- Loan Amounts: $1,000 to $10,000
- APR: 5.85% to 14.89%
- Terms: 12 months to 10 years
- Promotions: None
What is Credit Strong?
Austin Capital Bank has a division known as Credit Strong. They provide credit-builder loans to those with bad or no credit who wish to gradually improve their credit scores without any high risks or exorbitant charges.
Austin Capital Bank was established in 2006 as a community bank. This bank serves communities across Texas and has been recognized as one of the state’s fastest-growing and best-performing financial organizations.
While Austin Capital Bank provides banking services to the wider Texas region, Credit Strong operates in every state except Vermont, Wisconsin, and North Carolina.
Credit Strong is able to issue “loans” to individuals all around the nation thanks to the backing of a huge bank. These “loans” are intended to assist consumers with poor credit ratings in establishing a payment history in order to improve their credit score.
Furthermore, Credit Strong is an FDIC-insured organization, which means that your money and financial information are safe with them.
How Does Credit Strong Work?
Credit Strong loans aren’t the same as your typical personal loan. Traditional loans require you to borrow money from a bank and then return it over the length of your loan term.
Basically, you’d be debt-free at the conclusion of the payback term. However, the money you borrowed may or may not be still available.
You will “take out” a loan with Credit Strong that you will not get. Not straight soon, at least. Rather, your loan will be placed in a savings account and held there until the conclusion of your payback period.
You’ll continue to make monthly payments, which will be recorded to credit agencies and will help you improve your credit score, as well as pay interest on the loan.
Credit builder loans are what the company is renowned for. While this may seem to be an odd approach to save, the goal is to help you develop a solid payment history, which might improve your credit score.
The Process
In this portion of the Credit Strong review, let us look into the process of how the company can help you.
Credit Strong does not monitor your credit when you initially create an account with them and apply for a credit builder loan. This implies you may acquire a loan even if you have bad credit, and a hard inquiry will not affect your credit score.
Credit Strong puts the amount of your loan into a savings account after your application is accepted. This savings account will then be frozen, and you will not be able to access the funds from your loan.
This savings account offers a set interest rate, just like a traditional savings account. The interest rate for Credit Strong’s savings account is at .01 percent, which is a low rate.
You make a loan payment every month that includes both the principle and interest. Credit Strong receives the main payment and the interest payment is paid into the savings account (this is how they make money).
The three main credit agencies, Equifax, TransUnion, and Experian, are then notified of the successful payment by Credit Strong. This contributes to the development of your payment history, which over time increases your total credit score.
The sum in the previously locked savings account is released after you have entirely paid off your loan, along with the interest you earned on the savings account.
You may then select whether to keep your money in this Credit Strong savings account or move it to another.
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What Does Credit Strong Offer?
Let’s discuss what services the company offers in this part of the Credit Strong review.
Credit Strong offers a number of different loans, each with a different loan amount and length.
Loans with terms like “Subscribe 1,000” and “Subscribe 2,000” are $1,000 and $2,000 loans with terms of up to 10 years. Loans of $1,000 and 2,000, known as “Build and Save” loans, have a two-year repayment period.
The $5,000 and $10,000 “Magnum” loans have a term of up to ten years and are valued $5,000 and $10,000 respectively. Your monthly payment and the influence on your credit score will be determined by the loan you get.
The loans would not give you money upfront.
Credit Strong isn’t a typical loan company. You not only do not get any money up front, but you also pay greater costs than with a regular loan.
If you just need a personal loan, an unsecured loan from a bank or credit union is a lot more preferable.
Credit Strong was created with the goal of assisting individuals in improving their credit score and establishing a solid payment history. You start by deciding on a “loan” amount and period.
For example, with their Subscribe 1,000 plan, you may pay $15 per month for ten years and get a $1,000 refund at the conclusion of your term.
Of course, paying 120 $15 payments totals $1,800. So you’re spending $800 in interest to save $1,000 while still building credit. That may not seem to be a huge lot.
However, with the Subscribe and Magnum plans, you may pick shorter periods to save money on interest. The shortest term is one year, while the longest is ten years.
Credit Strong’s Build & Save programs, which have 12- or 24-month maturities, are particularly created for consumers who wish to attain their savings goal in a certain amount of time.
Another great feature of Credit Strong is that you may cancel at any moment without incurring any penalties. If you cancel before the end of your repayment period, you’ll get a refund for whatever you put down, less the interest.
No bad marks will be put to your credit reports if you didn’t have any late or missing payments before your account was canceled. There is also no early payback charge if you want to pay off your Credit Strong loan early.
The company is not a credit repair service.
The service provided by Credit Strong is not to be confused with credit repair. Negative marks on a person’s credit record may be removed using credit restoration services.
Credit Strong is not a credit repair company. It only informs the three main credit bureaus of a customer’s payment history.
Its reporting may assist enhance the client’s credit score if the consumer manages his or her credit well. However, if you default on your Credit Strong loan, the system will penalize you.
Delinquent payments will be reported to the same three credit bureaus as on-time payments. Your credit score may suffer as a consequence of this behavior.
Maintaining on-time payments with creditors is crucial, and you should also do so with Credit Strong.
Credit Strong Pricing
This section of the Credit Strong review is dedicated to discussing with you the fees you need to pay.
Admin Fee
The cost of creating an account is covered by this fee, which is payable at the time of loan origination. This cost may vary between $8.95 and $15, depending on the installment loan option you pick.
This non-refundable one-time charge is necessary to activate your credit builder loan.
Interest Rate
Your loan’s interest rate will be determined by the package you choose. This is a refreshing change of pace, since most interest rates are set by your creditworthiness, as well as the sort of loan and terms you choose.
You may anticipate to pay an interest rate of 3.74% to 14.89% at Credit Strong.
Lost Savings Interest
With a Credit Strong credit builder loan, there is an additional “fee” in the form of interest accrued on your savings account.
When you take out a loan, the money will be put into an Austin Capital Bank savings account while you pay off the debt.
While Credit Strong does not provide specifics on this savings account, it is reasonable to assume that it will pay interest and have a reasonable rate of return.
However, despite the fact that interest is accruing on your personal loan, you will not see any of it as a borrower. Credit Strong will keep any interest earned in your savings account in addition to charging a monthly interest rate on your loan repayment.
This interest could be substantial depending on your initial loan amount, the total loan term, and market trends over the course of your repayment.
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Some FAQs
For this part of the Credit Strong review, we will be answering some frequently asked questions.
How will Credit Strong improve your credit score?
With Credit Strong, every payment you make improves your payment history (which accounts for 35% of your overall credit score). Your credit score will almost certainly rise if you take out a Credit Strong credit booster loan.
However, a number of factors influence how much your credit score rises.
To begin, the amount by which your credit score improves is determined by your present credit status. Your credit score may not grow as much if you have ten years of negative credit practices on your account as if you simply have a few errors on your credit report.
Second, the amount to which your credit score improves as a result of a Credit Strong loan is determined on the kind of loan you take out with Credit Strong. If you take up a Credit Strong “build and save $1,000” loan and pay it off in two years, your credit score will not miraculously improve.
For example, your credit score will not rise as much as if you take out a “Magnum 10,000” loan that is significantly larger and would take ten years to pay off.
While there is no way to predict how much your credit score would rise as a result of a Credit Strong credit builder loan, you can rest certain that it will only enhance your credit score if you complete your payments on time.
Is your money safe?
Yes, Credit Strong accounts are kept at the FDIC-insured Austin Capital Bank. Deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to a maximum of $250,000 per account. Your whole account will be covered since none of Credit Strong’s loans come close to that amount.
Can you repay your loan early?
Paying up your Credit Strong loan ahead of time has no prepayment penalties or fees.
It’s crucial to remember, however, that your payment history and average account age are also factors in your total credit score, and cutting any of these short might result in you losing out on a better score.
How do you open an account?
To create an account with Credit Strong, go to their website. The application, according to Credit Strong, takes roughly 5 minutes to complete.
Because Credit Strong does not examine your credit, applying will have no impact on your credit. To qualify, you must have a valid checking account, debit card, or prepaid card.
Can you withdraw fund while paying your loan?
No, your money is kept in a separate savings account until the loan is completely paid off. You won’t be able to access that money until the loan period is up or you’ve paid off the full amount, whichever comes first.
The money will be unlocked at that point, and you will be able to withdraw, spend, or leave them in the savings account to earn interest.
Is the Service Worth It?
Credit Strong might be a fantastic option for anybody who wants to improve their credit. It’s simple to be authorized for a credit line without a credit check, and a large chunk of your “loan” payments will eventually turn into cash.
Just be sure to compare Credit Strong’s interest rates and costs to those offered by other companies.
Expect to lose money if you have a savings account that earns interest. The net will be an overall expenditure once the borrowing fees are deducted.
Credit Strong Pros and Cons
Pros
Credit Strong is secure.
A lot of apps that offer services such as loans and online banking do not have the backing of traditional financial institutions like banks. This makes depositing your money with them a little hazardous, since there’s a chance you’ll lose it all.
With Credit Strong, however, this is not the case. Your money is secure with Credit Strong since they are backed by a bank and are FDIC guaranteed.
There is no require credit check.
When you apply for a loan or a credit card, a lender or credit card issuer will almost always verify your credit score and history. It may be difficult to get any of these loans if you have a poor credit score.
Fortunately, there are no credit checks here. When you apply for a loan with Credit Strong, your credit score is not checked. This implies that regardless of your credit position, you may acquire a loan from them.
There are no penalties for canceling your account.
You may terminate your Credit Strong account at any moment without incurring any costs or penalties. You won’t owe on the sum owing, as you would with a regular loan, since Credit Strong kept onto your loan money.
You’ll have access to whatever amount you’ve paid down on your loan, minus the interest.
You get a monthly report of your credit score.
You may check your credit score for free once a year with each credit bureau. Credit Strong, on the other hand, has teamed up with TransUnion and promises to be able to provide you with a free monthly check of your FICO credit score.
This is an excellent tool for determining your present financial situation and whether or not your Credit Strong loan is assisting you in improving your credit score. This is a unique function that only a few other businesses provide.
Cons
The loans are more expensive than typical loans.
While loans for persons with bad credit are often more costly than standard loans, they are typically for lesser sums. Credit Strong’s loans are far greater than these lesser loans, yet they are still rather costly.
The “Subscribe 1000” loan, for example, has a 10-year interest rate of 13.50 percent. Many of these loans also come with administrative costs. Overall, these loans are prohibitively costly for loans that do not provide you with funds.
Your credit score will drop initially.
Taking up additional lines of credit might lower your FICO score at first since recent loans or credit lines account for 10% of your total credit score. This is why young people who have just applied for their first credit card will experience a drop in their credit score.
Creditors may assume you’re hurriedly establishing new lines of credit to pay off existing ones, which is why your credit score has dropped.
Your loan will still be charged with interest.
Credit Strong will technically retain your loan at their own bank, Austin Capital Bank, for you. However, even if they have the cash on hand at all times, you’ll still have to pay interest on the loan when it’s repaid.
Your interest rate may or may not vary from that of a regular personal loan, however the latter’s money would be accessible for use right away.
This is not the optimal solution.
Credit Strong’s loan is unsuitable for you if you desire to improve your credit score while simultaneously need cash. Their loans aren’t loans in the first place, as we’ve shown. When you are authorized for a loan, you do not get any funds into your bank account.
You don’t receive your money back until you’ve paid off your “loan,” which might take up to ten years depending on the kind of loan you acquire. Credit Strong’s loans do not offer you with a solution if you want a loan for emergency funds.
A credit-builder loan is designed to help you develop your credit. However, it is still your responsibility to maintain your account wisely, or the loan might backfire completely.
If you don’t pay your monthly loan installments on time, the credit bureaus may record you as late. This might have a major negative influence on your credit score.
Final Verdict – Credit Strong
Before I end this Credit Strong review, I would like to share a few more insights that could help you.
It’s not uncommon for individuals to amass debt. In fact, taking out loans to start a company, send their children to prestigious schools, or even purchase the newest technology they’ve had their eye on has become rather normal in recent years.
In today’s world, it’s rare for someone to be debt-free. Many institutions encourage consumers to take out loans in order to make money.
If you ask me, having debts and loans is OK as long as you can pay them off. Also, pay attention to what you’re doing with your money. If you wish to take out loans, be aware of the consequences.
Also, get in the habit of keeping track of your expenses. If you don’t need anything, don’t take out a loan merely to buy it. You don’t need a new phone every year, and you certainly don’t need more than 10 pairs of shoes.
Spend your money based on your pay grade. This is something that the majority of people overlook. So, if you’re looking for a way to generate some extra cash, you may want to check out the following part.
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