MoneyLion Credit Builder Review – DIGIWIZ CENTRAL

MoneyLion Credit Builder Review

Our experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our partners; however, our opinions are our own. Terms apply to offers listed on this page.

Establishing a positive credit history is a vital step toward a stable financial future. If you’re looking for ways to build credit but can’t qualify for traditional loans, a credit builder loan is a more accessible alternative.

Featured among our top credit builder loans, MoneyLion’s Credit Builder Plus loan is available in most states, doesn’t require a credit check for approval, and comes with a variety of other financial tools. However, it also comes with monthly subscription fees and potentially high interest rates. Read on to see whether it’s a good fit for you.

MoneyLion Credit Builder Loan Overview

According to MoneyLion, more than half of members raise their credit scores by 42 points within 60 days. However, MoneyLion’s Credit Builder Plus is just one of several features the fintech company offers.

The main appeal of MoneyLion is the collection of financial tools available when you sign up for its subscription with a MoneyLion Credit Builder Plus Loan – Fees Display. Customers gain access to features like an investment account, up to $500 cash advances, and mobile banking with benefits. However, customers just looking for a credit builder loan should look elsewhere, as you’ll have to pay for the monthly fee in addition to any interest charged on the credit builder loan itself. 

MoneyLion’s credit builder loan is available in 42 states and Washington, D.C; it’s not currently offered in Colorado, Indiana, Iowa, Maryland, Montana, Nebraska, Nevada, and Vermont. To qualify, you must be at least 18 years old and a United States citizen or permanent resident with a Social Security number. 

MoneyLion’s Credit Builder loan doesn’t require good credit or any credit history for approval, and applying won’t result in a hard inquiry on your credit report. Instead, MoneyLion confirms that you have a checking or spending account that has been open for at least 60 days. That account must be in good standing with a verifiable income stream and have a sufficient balance and transaction history (as determined by MoneyLion).

MoneyLion has a Trustpilot rating of 4.6 stars out of five based on feedback from over 28,000 reviews, with 91% of reviewers leaving four or five stars. While MoneyLion is not accredited by the Better Business Bureau, the company’s profile there also boasts a rating of 4.74 stars out of five based on over 4,000 reviews.

On the other hand, MoneyLion has also received a high volume of complaints, with nearly 1,300 filed in the past three years. Among negative reviews on both sites, common issues raised by MoneyLion users include unresponsive customer service, unexpected costs, and difficulty signing up.

Note: These reviews (both positive and negative) pertain to MoneyLion generally and not exclusively to the credit builder loan.

How MoneyLion Credit Builder Loan Works

To be eligible for a credit builder loan, you’ll need to first sign up for MoneyLion’s Credit Builder Plus membership, which has a MoneyLion Credit Builder Plus Loan – Fees Display In addition to credit builder loan eligibility, Credit Builder Plus membership offers financial tools and benefits like credit monitoring, cash back rewards, access to MoneyLion investment and mobile banking accounts, and more. 

Once you’re eligible, you can apply for a Credit Builder Plus loan. MoneyLion will then confirm your identity and review your linked bank account to evaluate your application. If you’re approved, a portion (or, in some cases, all) of your loan amount will be available for disbursal into an account of your choice. The rest is deposited into a Credit Reserve Account, where it’s held until your pay off the loan. Your Credit Reserve Account may earn interest at prevailing market rates but is not FDIC-insured. If you default on your loan, the Credit Reserve Account may be liquidated to satisfy your remaining debt.

MoneyLion’s Credit Builder Plus loan maxes out at $1,000, paid over a 12-month term. The APR ranges from MoneyLion Credit Builder Plus Loan – Regular APR, respectively far below and above the current average rates for personal loans. That said, the maximum interest rate is far higher than competing credit builder loans, like the Self Credit Builder Account – Product Name Only.

As you pay down your loan, MoneyLion reports your on-time payments to the three major credit bureaus. Those positive data points are added to your payment history, which is the most important component of your credit score. However, MoneyLion does not guarantee that paying off a Credit Builder Plus loan will improve your credit.

Within 10-14 business days of your final loan payment, you can access the money in your Credit Reserve Account. Once the loan term is complete, you can continue your Credit Builder Plus membership (if you value the other features) or cancel at any time with no additional fees.

MoneyLion Credit Builder Loan Pros and Cons

The Credit Builder Plus package offers benefits you won’t get from other credit builder loans, but you may end up paying more for them.

MoneyLion Credit Builder Loan Pros

Reporting to three credit bureaus — MoneyLion reports your payments to all three major credit bureaus (Equifax, Experian, and TransUnion), so you can improve your credit score across the board.

Additional benefits — Credit Builder Plus membership comes with services like credit monitoring, 0% APR cash advances, and more, many of which are uncommon among other credit builder loans.

Cash back rewards — You can offset some or all of your monthly fees with rewards from the Lion’s Share loyalty program. Rewards are issued based on your monthly purchases and how frequently you log in to the MoneyLion app.

MoneyLion Credit Builder Loan Cons

High cost — The monthly fee and potentially high interest rates can make MoneyLion a relatively expensive way to build credit.

Inflexible loan duration — MoneyLion only offers a 12-month loan term; there’s no option to apply for a longer loan to bolster your credit history further.

Who Is MoneyLion Credit Builder For?

Like other credit builder loans, MoneyLion’s Credit Builder Plus loan is designed for those with limited or negative credit history who are looking to build (or rebuild) their credit profiles. It’s a particularly good fit if you’ll make use of the additional services that come with a Credit Builder Plus membership, and if you’ll be able to reduce or eliminate monthly fees through the Lion’s Share loyalty program.

Applying for a MoneyLion credit builder loan is only a good idea if you know you’ll be able to make monthly payments on time and in full. Late or missed payments may be detrimental to your credit, defeating the purpose of getting the loan in the first place.

If you won’t get much value from MoneyLion’s additional services, or if you won’t be able to offset the monthly fees, then consider looking for a less costly option among the other top credit builder loans. You can also explore other less expensive ways to build credit, like a secured credit card. You can also find ways to build credit with payments you’re already making, such as a rent reporting service. You can find our picks for the best rent reporting services here. 

Compare Credit Builder Loans

MoneyLion Credit Builder Frequently Asked Questions (FAQ)

Does MoneyLion help build credit?

By making on-time payments toward your credit builder loan, you can add positive data points to your credit history that may help improve your credit score. However, results are not guaranteed.

Does everyone get approved for MoneyLion?

Not everyone qualifies for a MoneyLion credit builder loan, but you have a good chance of being approved if you meet the age, identity, and financial requirements.

How long does a MoneyLion loan take?

MoneyLion offers credit builder loans exclusively with a 12-month term. You can pay off your loan early with no penalty, but early repayment may limit the benefit to your credit score.

How much does MoneyLion lend?

Credit Builder Plus membership gives you access to loans of up to $1,000.

Read the original article on Business Insider
Please follow and like us:
Pin Share

Leave a Reply

Your email address will not be published. Required fields are marked *

RSS
Follow by Email
LinkedIn
Share