Full Disclosure: I don’t recommend taking out an installment loan unless you understand the costs and how the process works. I did my best to explain the process, but I apologize if it is still confusing.
Good afternoon everyone, I hope your week is going well. 12 months ago, I started a journey to increase my credit score by opening an installment loan called a Credit Builder Account with Self (Self was previously named Self Lender). Before I started this experiment, the Account Mix portion of my credit score was very 1 sided. I had 30+ credit cards, but no auto loans, home loans, student loans, or installment loans. As of September 2020, my Credit Sesame account shows that I now have 2 types of accounts (30+ credit cards and 1 installment loan). This information can be found at the 3 credit bureaus and on Credit Karma, but the screen on Credit Sesame was the prettiest and easy to understand.
As a reminder, the Account Mix portion of your credit score only makes up 10% of your overall credit score, so it is not as important as your Payment History (35%) and your Credit Usage (30%). In this post, I will show you how the Credit Builder Account works and how much it costs to take out the installment loan.
