StellarFi Review

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Like it or not, modern Americans are increasingly defined by their credit score — despite the paradox that getting credit often requires having credit. Adding to the already confusing equation is the fact that credit scores among marginalized groups — from immigrants and low-income individuals to BIPOC Americans and those who identify as LGBTQ — are statistically lower, which leads to disparities that can be difficult to overcome via traditional credit-building methods. 

StellarFi offers a solution for accessing credit based on paying monthly bills. With tri-bureau reporting and competitive pricing, StellarFi is one of the best rent and utility reporting services on the market. Read our StellarFi review to determine if this service fits your financial needs.

StellarFi Overview

Since 2021, the folks at StellarFi have been helping individuals boost their credit score by paying their bills. In fact, the company (founded as a Public Benefit Corporation) is mission-driven to disrupt the poverty cycle by enabling financial equity through credit building. 

StellarFi currently offers two membership tiers — lite and prime — with a third coming soon. The two currently available memberships cap monthly bill reporting at $500 and $25,000 respectively. As a result, lite is more of a utilities reporting service while premium has a high enough cap for rent reporting.

Both plans offer tri-bureau reporting, meaning it reports payments to the major three credit bureaus that supply potential creditors with your credit report. This is a crucial feature for a rent reporting service to have, but it’s surprisingly absent from many of them. 

Consumers in all 50 states can build credit quickly by paying their monthly bills — from cell phones and streaming services to utilities and rent — regularly and on time. In addition to affordable membership rates, the company boasts zero minimum income requirements, credit checks, interest, or deposits. 

StellarFi has been reviewed favorably by its customers, receiving an average of 4.5 stars out of five over 59 reviews on its Trustpilot page. It also sports fairly responsive customer support, featuring live agents reachable on StellarFi’s website.

How StellarFi Works

StellarFi helps individuals build their credit by doing something we all have to do anyway: pay monthly bills. Most credit bureaus are on the lookout for consistent, on-time payments and proper credit usage — both of which StellarFi reports (after “paying” your bills via their virtual credit card connected to your personal bank account) — to all three of the major credit bureaus each month. 

StellarFi offers two memberships, with a third coming soon, for different credit-building needs: 

Lite (StellarFi Lite – Fees Display) helps individuals with less than $500 in total monthly bills build credit quickly and effortlessly.

Prime (StellarFi Prime – Fees Display) helps individuals automatically build credit even faster with up to $25k in total monthly bills plus one-on-one live credit coaching.

Premium ($19.99 per month) is coming soon as a means of automatically building credit with all monthly bills; the added convenience of flexible payment dates and ACH transfer; plus one-on-one live credit coaching. 

While rent and utilities reporting services usually work as the middle man, chaperoning the payment information from its source to the credit bureaus, StellarFi operates a little differently. StellarFi actually pays off your bills on your behalf, then you pay them back. 

Unfortunately, this does mean that if you cannot make a payment, StellarFi will report your missed payments to the credit bureaus as delinquent, undermining any efforts to build credit. This also means those reported payments on your credit report are shown as one tradeline under StellarFi instead of multiple different accounts.

StellarFi Credit Builder Pros and Cons

Unlike others in the industry, StellarFi offers neither quick fixes nor hidden gimmicks. It offers a holistic, long-term approach to getting consumers’ credit back on track. 

StellarFi Credit Builder Pros 

Tri-bureau reporting – One of the most important aspects of a credit builder product that is surprisingly uncommon, StellarFi offers payment reporting to all three credit bureaus on all plans.Receive one-on-one live credit coaching – Prime and Premium members gain access to a credit coach. 30-day free trial – Only offered for the Prime tier, StellarFi offers a 30-day free trial to users, which automatically rolls into its full-price premium plan when it ends.

StellarFi Credit Builder Cons

No retroactive reporting –  Some rent and utilities reporting services can report up to 24 months of payment history prior to signing up. Unfortunately, StellarFi does not have this feature.Potential to miss payments – Most rent reporting services are just reporting payments made to your landlord, while StellarFi is paying your landlord and expecting payments in return. This means that when you cannot pay your rent, what that actually means is you cannot pay StellarFi back. This may result in a delinquency on your credit report, dropping your credit score.

How StellarFi Compare to Its Competition

StellarFi holds its own against the best rent reporting services, reporting to all three credit bureaus at an affordable rate. That said, StellarFi’s method of reporting rent opens its users up to issues that other rent reporting services do not, which is the possibility of missed payments that can result in credit-injuring delinquencies. 

Here’s how StellarFi stacks up against its competition:

CompanyPriceStellarFi PrimeStellarFi Prime – Fees DisplayBoom Pay$10 setup and $2 per monthLevelCredit$6.95 per monthRentReporters$94.95 setup and $9.95 per month

Who Is StellarFi Credit Builder For?

StellarFi was designed for individuals — in particular those from marginalized groups — who have struggled to access credit, or increase their access to credit, as a means of establishing and growing credit over time. Its membership plans are also suitable for those individuals whose credit history needs to be repaired. No credit score is needed to sign up; all that’s required is your name; email address, bank account, routing number, and Social Security number. 

While this is a great way for people without prior credit history to build credit with transactions they’re already making, it’s a risky product for people who aren’t sure if they can pay all their utilities and rent consistently, as missing a payment can result in a delinquency. If you can’t reliably cover your monthly costs, you may need to find a different rent reporting service.

StellarFi Credit Builder Frequently Asked Questions (FAQ)

How does StellarFi increase my credit score?

StellarFi targets the two most crucial credit-building factors: payment history and credit utilization. By reporting a higher credit limit, StellarFi optimizes your credit usage (which can reduce your credit utilization) and increase your credit score — which may jump as soon as the StellarFi account is added to your credit report. 

Does StellarFi charge overdraft or other hidden fees?

StellarFi prides itself on zero hidden fees and boasts complete overdraft protection for all bills, assuming the linked bank account has sufficient funds. In the event that a bill is not paid on time, StellarFi does not charge the consumer any additional fees. Check with your bank as it may. 

How to contact StellarFi customer service

You can contact StellarFi by email at [email protected] or on the StellarFi Support website.

Read the original article on Business Insider

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