6 Best Credit Builder Loans to Boost Your Credit Score in 2025

May 28, 2025 • Credit Repair

Struggling to build or rebuild your credit score? A credit builder loan could be one of the simplest tools to help you get back on track. It’s designed for people who don’t qualify for traditional loans or credit cards and want to show they can make on-time payments.

In this guide, you'll learn how credit builder loans work, who they’re best for, and what to look for when comparing options. We’ll also break down the best credit builder loans in 2025, including what makes each one stand out.

Keep reading to find the right loan for your needs and take the first step toward a stronger credit score.

6 Best Credit Builder Loans of 2025

If you’re ready to get started, these are the best credit builder loans available this year. Each one offers something a little different, from low fees to flexible loan terms.

We’ve compared the top options based on pricing, ease of use, credit bureau reporting, and customer feedback. Details like rates and availability can change, so always check the lender’s site before applying.

1. Self Credit Builder Account

Self is one of the most popular credit builder loan providers in the country. It’s a good pick for people who want to build credit without needing a credit check or large upfront deposit. Everything is managed through a user-friendly mobile app.

Loan amounts: $520 to $1,800
Loan terms: 12 to 24 months
APR: Around 15.65%
Credit check: No
Reports to: All three credit bureaus
App access: Yes

2. MoneyLion Credit Builder Plus

MoneyLion combines credit building with cash access and membership perks. Its Credit Builder Plus program offers a small loan with fast access to some of the funds, plus credit reporting to all three bureaus.

Loan amounts: Up to $1,000
Loan terms: 12 months
APR: 5.99% to 29.99%
Credit check: Soft inquiry
Reports to: All three credit bureaus

3. Chime Credit Builder Secured Account

The Chime Credit Builder Secured Account works more like a secured credit card, but it’s designed specifically to help you build credit without interest charges. It’s a strong option if you already have a Chime Spending Account.

Type: Secured credit account
Deposit required: Yes
APR: 0%
Credit check: No
Reports to: All three credit bureaus

4. CreditStrong

CreditStrong offers flexible credit builder loans with some of the largest loan amounts on the market. You can choose from several plans based on your budget and goals, making it easy to find the right fit whether you're just starting or rebuilding.

Loan amounts: $1,000 to $10,000
Loan terms: 12 to 120 months
APR: Varies by plan
Credit check: No
Reports to: All three credit bureaus
App access: Yes

5. Kikoff Credit Builder

Kikoff offers a virtual credit line that reports to two major credit bureaus. It’s designed to be simple and extremely affordable, with plans starting at just $5 per month. You can apply with no credit check and get approved instantly.

Type: Virtual line of credit
Credit limit: Up to $750
Monthly fee: $5 to $10
Credit check: No
Reports to: Equifax and Experian

6. DCU Credit Builder Loan

Digital Federal Credit Union (DCU) offers a traditional credit builder loan with competitive rates. It’s a solid choice if you’re open to joining a credit union and want a simple way to build your credit score.

Loan amounts: $500 to $3,000
Loan terms: Up to 24 months
APR: Starts at 5.00%
Credit check: Yes
Reports to: All three credit bureaus

What Is a Credit Builder Loan, and How Does It Work?

A credit builder loan is meant for people who either have no credit history or want to rebuild their credit score. It’s different from a regular loan because you don’t get the money upfront.

Instead, the lender holds the money in a locked savings account while you make monthly payments. Once you finish the loan term, you get the money back—often with a little interest—minus any fees.

This structure helps you build positive credit habits while giving lenders less risk.

Simple Definition

A credit builder loan is a small installment loan where the lender holds the funds in a savings account until you finish making payments. You don’t need good credit to get approved.

Why It Helps Build Credit

Your monthly payments are reported to all three major credit bureaus. These reports help build your payment history, which is the biggest factor in your credit score. It also adds to your credit mix, which can slightly improve your score if you don’t already have installment credit.

Who Should Use a Credit Builder Loan?

Credit builder loans are best for people who need a low-risk way to build credit. That includes:

People new to credit – This includes students, recent immigrants, or anyone who has never had a credit card or loan.
People with bad credit – If you’ve missed payments or had accounts in collections, a credit builder loan can help you rebuild.
People denied traditional credit – If your credit score is too low to qualify for a personal loan or credit card, this is an option worth considering.

How to Compare Credit Builder Loans

Not all credit builder loans work the same way. Some are simple and low-cost, while others come with confusing terms or hidden fees. Here's what to look for when deciding which one is right for you.

Look for Low Fees and Transparent Terms

Some lenders charge setup fees, monthly maintenance fees, or early withdrawal penalties. Read the fine print and use the total cost—not just the APR—to compare options. A lower APR doesn’t always mean a cheaper loan if there are extra charges involved.

Check Which Credit Bureaus They Report To

The whole point of a credit builder loan is to help your credit score. Make sure the lender reports to all three credit bureaus: Equifax, Experian, and TransUnion. If they only report to one or two, the loan may have less impact.

Consider Payment Flexibility and Loan Amount

Look for a loan with a monthly payment that fits your budget. Missing a payment defeats the purpose. Some lenders let you choose your loan amount and term, which gives you more control over the cost and commitment.

Mobile App and Customer Service Support

If you want to track progress easily, a mobile app is helpful. Also check reviews for customer support—especially if you think you might need help with payments or account access.

Early Withdrawal Policies (If Applicable)

Some lenders let you cancel the loan early, while others charge penalties. If you think you might need the funds before the loan ends, check whether early withdrawal is allowed and how it affects your credit score.

Tips for Getting the Most Out of a Credit Builder Loan

A credit builder loan can work well, but it’s not automatic. Here’s how to make sure it actually helps your credit score:

Always pay on time – Payment history makes up the biggest part of your credit score. A single late payment can hurt your progress.
Don’t open too many accounts – If you already have a credit builder loan or a secured card, adding more won’t help and could backfire.
Use it as a stepping stone – Once your score improves, apply for better financial tools like a secured credit card or low-limit unsecured card.
Monitor your credit score – Keep an eye on your credit reports and scores to track your progress and catch any reporting errors early.

Alternatives to Credit Builder Loans

If a credit builder loan doesn’t fit your needs, there are other ways to build credit safely. These options may work better depending on your goals or financial situation.

Secured Credit Cards

You put down a refundable deposit, which becomes your credit limit. Secured cards report to the credit bureaus and help build your payment history, just like a loan.

Authorized User Status

You can ask a family member or close friend to add you as an authorized user on their credit card. If the card is in good standing, you get the benefit of their positive payment history on your credit report.

Rent and Utility Reporting Services (Like Experian Boost)

Some services report your rent, phone, or utility payments to the credit bureaus. These don’t replace a credit account, but they can still help build your credit score if you pay those bills on time.

Buy Now Pay Later Plans With Credit Reporting

Some buy now, pay later providers—like Affirm—report payments to the credit bureaus. These plans are short-term but can help if used responsibly and paid off on time.

Final Thoughts

A credit builder loan can be a smart way to build or rebuild your credit score without borrowing a lot of money. It’s low risk, easy to manage, and accessible even if your credit history isn’t strong.

Make sure to compare lenders carefully, pick a loan that fits your budget, and track your credit progress as you go. Small, steady wins are what move your score in the right direction.

Check out the top recommended credit builder loans above and choose the one that makes the most sense for your situation.