Cheese vs. Self: Which Credit Builder Loan Is Better For You?
If you're looking for a way to build credit and improve your credit score, you may have come across Cheese Credit Builder and Self Credit Builder. These two credit builder services are designed to help people with no or poor credit establish credit. But which one is right for you? In this article, we'll compare Cheese Credit Builder and Self Credit Builder in terms of their features, benefits, and costs, so you can make an informed decision.
What is Cheese Credit Builder?
Cheese Financial Inc., based in California, is dedicated to helping people build credit and grow savings with simple and automated solutions. Cheese offers a credit builder loan that helps people build their credit while saving their money.
Upon approval, customers start to make monthly on-time payments. These payments are reported to all three credit bureaus and added to your credit builder account. Cheese partners with Lineage Bank, member of FDIC; customer’s deposits are FDIC insured.
Cheese doesn’t charge any upfront fees or admin fees. Signing up is completely free. The only cost is an APR ranges from 5% to 16% depending on the state of residency. Cheese Credit Builder has very flexible loan plans*:
- Plan 1: $44.42 per month for 12 months; receive $500 at the end of the loan term
- Plan 2: $23.54 per month for 24 months; receive $500 at the end of the loan term
- Plan 3: $88.85 per month for 12 months; receive $1,000 at the end of the loan term
- Plan 4: $47.07 per month for 24 months; receive $1,000 at the end of the loan term
- Plan 5: $177.70 per month for 12 months; receive $2,000 at the end of the loan term
- Plan 6: $94.14 per month for 24 months; receive $2,000 at the end of the loan term
(*Interest calculated based on California 12% APR. APR varies by state of residency. Actual monthly repayment may be less.)
Upon approval, you’ll start making repayments monthly. Cheese reports all your repayments to three major credit bureaus: TransUnion, Equifax, and Experian, which helps customers to build their payment history. At the end of the loan term, customers get their money back minus the interest and have their credit built.
If you only have credit cards, which are considered revolving credit, Cheese Credit Builder can diversify your credit mix by adding a personal loan to your credit profile. This may help improve your credit score, too.
What is Self?
Self, formerly Self Lender, was founded by James Garvey and is based in Austin, TX. It is a fintech platform that offers credit builder loans and a secured credit card. These loans offer consumers an opportunity to build savings and credit at the same time. Self reports your payments to all three major credit bureaus, which can help establish a credit history for those with little to no credit.
The platform offers 4 different payment options to fit your budget, with a non-refundable administrative fee of $9 and an APR of 15.65% to 15.97%. Customers can choose from one of these options:
- Small Builder: $25 per month for 24 months; receive $520 at the end of the loan term
- Medium Builder: $35 per month for 24 months; receive $724 at the end of the loan term
- Large Builder: $48 per month for 24 months; receive $992 at the end of the loan term
- X-Large Builder: $150 per month for 24 months; receive $3,076 at the end of the loan term
Note: a $9 admin fee is charged while opening a Self credit builder account.
Self deposits the loan proceeds into a certificate of deposit (CD) and holds them until the program is completed. During the payment term, your payment activity is reported to Experian, TransUnion, and Equifax, which helps in building your credit score by improving your payment history. At the end of the payment term, Self returns your monthly payments to you, after deducting any applicable interest and fees.
Compare Cheese and Self
After an introduction of the basic information of Cheese Credit Builder and Self, let’s closely examine their similarities and differences to help you choose which one is right for you.
Similarities between Cheese Credit Builder and Self
Both Cheese Credit Builder and Self Credit Builder are credit builder loans; they work the same way. You get access to a credit-builder account, you make monthly payments into this account, and both of them report your payment history to the credit bureaus, which helps you establish credit. After the loan matures, you get the paid principal back, minus the interest.
Both Cheese and Self report to 3 credit bureaus: TransUnion, Equifax, and Experian
The deposits with Cheese and Self are both FDIC insured.
Cheese and Self both help customers build credit and save money simultaneously.
Differences between Cheese Credit Builder and Self
Now, let’s look at the significant differences between these two products in terms of loan plans, costs, approval requirements and the timeline of credit reporting.
It is obvious that Cheese Credit Builder has more flexible plans. You can choose from 6 repayment plans in total to fullfill your needs. For some people who are not sure about these credit products, they can pick a 12 months’ plan from Cheese and see how it goes.
However, Self only offers 4 repayment plans, all of which are for 24 months. If you drop out the loan in the middle of the 24 months, it doesn’t do good to your credit profile. In this case, if you’re not so sure, Cheese has shorter terms for you.
The very big difference between Cheese and Self is that Cheese doesn’t charge any upfront fees or admin fees, while Self asks for a $9 one-time admin fee. Besides that, the APRs differ. The APR ranges from 5% to 16%. Check out your local rates here. Self has an APR of 15.72% to 15.97%.
If you are looking for a credit builder loan that costs less, remember to compare the APRs of Cheese and Self. Cheese possibly has a lower interest rate depending on where you are located, plus, it doesn’t charge any other fees.
Timeline of credit reporting
Another big difference between Cheese and Self is how soon they report your credit builder account and your payments.
According to Self, payments typically appear on your credit report 60 days from your first due date, and your first due date is the next month after you opened an account (30 days later). However, at Cheese, you make your first payment the next business day after you open an account. This is one month sooner than other credit builder companies, allowing your payments to be reported to credit bureaus much faster. So generally, it takes 10-30 days* for your payments to show up on your credit report once reported.
(*The time it takes for a Cheese Credit Builder Account and payments to appear on a credit report varies. It depends on when the credit bureaus update your credit report.)
Cheese vs. Self: Which One Should You Use to Build Credit?
In conclusion, Cheese Credit Builder and Self work the same way. They are both credit builder account to help people build credit and save money at the same time.
While both of them report payments to 3 credit bureaus, Cheese Credit Builder is a better option if you are looking for more flexible repayment plans. Meanwhile, Cheese probably costs less because it doesn’t charge any admin fees and has lower APR options (based on your state of residency). Lastly, Cheese can build your credit faster.
Sign up today and build credit with Cheese easily.