How does Credit Builder Work?
When you open Credit Builder, we open a Credit Builder Savings Account and Line of Credit in your name. These banking services are provided by our bank partner, Cross River Bank, Member FDIC.
You decide how much you want to save each paycheck, and that amount is transferred from your Line of Credit to your locked Credit Builder savings account every pay period. This transfer is done automatically when you enroll in our optional AutoSave Program or can be manually initiated by you.
Every statement period (which we align to your pay periods), you pay off the total amount of savings you have added from your Line of Credit to your locked Credit Builder Savings Account during that period. We report your payments to all three credit bureaus.
Every time you save $500 that amount is available for you to use. Want to access the money to cover expenses? Go for it. Want to keep that $500 safe for a rainy day? Kudos.
How to get the Credit Builder Plan Started?
In order to get your Credit Builder plan started you must (1) make a Qualifying Direct Deposit in the current or prior month before application or 90 days after application or (2) use Pinwheel to connect your paycheck.
What is a Qualifying Direct Deposit
A Qualifying Direct Deposit (“QDD”) is a single deposit into your Credit Karma Money Spend Account that is initiated from outside of the Credit Karma Money Platform. Transactions that are not QDD include: Promotional deposits into your Spend account made by Intuit Credit Karma; deposits from your Save account; or deposits initiated from the Credit Karma Money platform.
Is it really free? What's the catch? How do you make money?
It is really free, no catch! Credit Karma Credit Builder charges no fees or interest. We believe building credit should be free and flexible. We want to invest in building a positive relationship with you, so we make our Credit Builder free!
How does the AutoSave Program work?
The AutoSave Program includes Autosave and Autopay. Autosave will automatically add the amount you want to save each pay period from your Credit Builder Line of Credit to your locked Credit Builder Savings Account. Autopay will debit the amount owed to pay off the outstanding balance on your Line of Credit every time you get paid. You can set the AutoSave Program and watch your savings grow automatically. You can also turn off the AutoSave Program at any time. Turning off the AutoSave Program will also turn off Autopay.
When can I access my savings?
We want to help you to invest in building credit and saving money. Every time you pay a total of $500 towards your savings account, we unlock that amount for you. The $500 is transferred to your unlocked Credit Karma Money account. As you keep saving, we keep unlocking your account in $500 increments.
What if I need to pull money from my savings account and I don't have $500 saved yet?
If you need money now, please give us a call at (888) 236-5798. We can help you get the money you need.
What if I want to draw more money from my Line of Credit to my savings account?
Your Line of Credit allows you to add money from your available credit to your savings account each statement period. You can increase the amount of your transfer any time by logging onto your account and changing your AutoSave Program amount. You can also decrease the amount of your transfer (minimum of $10 per statement period) following the same process. You can also manually initiate a transfer from your Line of Credit to your savings account at any time.
Will bigger payments improve my credit score?
Not necessarily. Bigger payments can help you save money and reach your goal faster but may not build credit faster than smaller payments.
If I save more, will my credit score go up?
We report on-time payments and your Line of Credit to the Credit Bureaus. The more on-time payments you make, the more you save, and the longer you have your Credit Builder active, the more likely it is to help build your credit. Of course we can’t guarantee that Credit Karma Credit Builder will increase your credit score, but we’re helping set you up for success.
Can I transfer money from my Line of Credit to my savings account at any time?
You can use your Line of Credit to add money to your Credit BuilderSavings Account at any time during the statement period as long as you have not reached your credit limit. Every time you add money to your Credit Builder Savings Account (i.e., “draw” on your Line of Credit) this amount is added to your balance (i.e., the total amount outstanding on your account). You can manually pull from the Line of Credit, do it automatically with the AutoSave Program, or do both.
How much do I have to pay each billing cycle?
You will receive a statement after each billing cycle that shows, among other things, your ending balance, required payment and the payment due date. The payment due date will be at least 14 days after you receive your statement.
The ending balance is your balance at the end of your billing cycle, and the full amount you owe Credit Karma Credit Builder at the end of the billing cycle. We calculate your ending balance by taking the sum of all draws (i.e., money you have added to your Credit Builder Savings Account from your Line of Credit) and any reversed or canceled payments, and then subtracting the sum of all payments and credits up until that time.
The required payment is the amount you must pay to Credit Karma Credit Builder in order to keep your account current. To calculate your required payment for each billing cycle, we (1) take your ending balance and subtract any unpaid portion of any previously calculated Required Payment; (2) take the lesser of that amount and $100; (3) take the lesser of that amount and your balance.
Can I pull from the Line of Credit into any account?
Your Line of Credit can only be used to add money to the Credit Builder Savings Account associated with your Credit Karma Credit Builder.
What can I use my Line of Credit for?
Your Line of Credit can only be used to add money to the Credit Builder Savings Account associated with your Credit Karma Credit Builder.
Why is this better than a credit builder installment loan?
Our Credit Builder is better than the other credit builder installment loans out there because it has no fixed term, is flexible, and most importantly is FREE! Credit Builder is a Line of Credit and a savings account. The Line of Credit increases your overall credit limit and helps you build credit even when you aren’t making payments every month. We also report your payments to the credit bureaus, which can further help you build your credit. Our plan is flexible and allows you to choose when and how much you’d like to save. You can keep your Line of Credit and savings account as long as you want, and it’s totally free!
Did we mention that it’s free? Credit building should be free.
Why is this better than a secured credit card?
Do you like making upfront deposits? Neither do we. Secured cards require upfront deposits in order to begin using the card and building credit. Your credit limit is based on how much money you are able to deposit upfront and some secured credit cards charge a fee.
Our Credit Builder is completely free and does not require an upfront deposit. Plus, instead of using your deposit to pay for things, you’re saving! You get access to your savings every time you save $500.
How do I make payments?
Once you’ve decided how much you want to save each paycheck, you can set up the AutoSave Program, which will automatically transfer money from your Line of Credit to your locked Credit Builder Savings Account every statement period.
We recommend that you set up the AutoSave Program so that you are making automatic contributions to your Credit Builder Savings Account. You can set up autosave by providing your Credit Karma Money Spend account details. Every payment date, autosave will pay off your Line of Credit balance from your Credit Karma Money Spend account, ACH payments may take 1-2 business days, but payments made before midnight Pacific Time are processed on the same day. You can always turn off autopay or change the account before the day of your payment. You can also still make one-time payments without disrupting auto-pay.
If you wish to manually save and make payments, you can initiate them from your Credit Karma Money Spend account in the Credit Karma Credit Builder Account Center once you have your Credit Builder set up.
How do I set up AutoSave?
If you wish to turn on Autosave, you can activate the autosave feature using the following steps:
- Login to your Credit Karma account and select on the Money Tab.
- Click into the Credit Karma Credit Builder Account Center
- Verify that AutoSave is on.
- Scroll down and click on the “Saving & Payments” option
- Confirm that you see the AutoSave is OFF card. Click on the Toggle
- Select Advance Amount page
- Confirm turn on AutoSave page
- Select Finish.
How do I turn off AutoSave?
If you wish to turn off Autosave, you can deactivate the autosave feature using the following steps:
- Login to your Credit Karma account and select on the Money Tab.
- Click into the Credit Karma Credit Builder Account Center
- Verify that AutoSave is on.
- Scroll down and click on the “Saving & Payments” option
- Confirm that you see the AutoSave is ON card. Click on the toggle.
- Confirm that you would like to Turn off Autosave
- Select Finish.
Can I close my Credit Builder?
You can close your Credit Builder any time. Please note that closing your Credit Builder may negatively impact your credit score. When you close your Credit Builder, any savings that you have paid off will be unlocked for you to access. Before closing your account, please give us a call at (888) 236-5798. We can help you find ways to achieve your financial goals.
Will closing my Credit Builder hurt my credit?
Closing your Credit Builder may hurt your credit. Credit scores can be impacted by closing credit lines, decreasing overall credit limit, and average credit line age. Closing your credit builder may impact any or all of these factors that the credit bureaus use to determine your credit score. Our Credit Builder is flexible, so you don't need to save money every month if things get tight.
If you need help closing your Credit Builder, give us a call at (888) 236-5798.
Do I have to save every month?
You don’t have to save every month if you don’t want to. One of the advantages of Credit Builder is flexibility. Save when you want! Saving every month will help you reach your savings goal faster and unlock your money faster, but how and when you save is entirely up to you. As long as you keep your account active*, you will be building credit.
*In order to maintain an active account, we require that you use your Line of Credit to make a transfer to your Credit Builder savings account and pay off your outstanding balance at least once every 3 months after opening.
What bank is my savings account at?
Credit Karma Credit Builder partners with Cross River Bank to provide the savings account to you. Your savings account and the amount in your savings account are FDIC insured through Cross River Bank. That means that the federal government guarantees your deposits up to $250,000.
Who is Cross River Bank?
Cross River Bank is one of Credit Karma Credit Builder's banking partners that helps provide your Credit Builder i savings account. They are a member of the Federal Deposit Insurance Corporation (FDIC). Check out our Bank Partners page for more information.
Credit Reporting
What's a Line of Credit?
A Line of Credit is a loan with a borrowing limit that you can use at any time, over and over again. You can use the money in the Line of Credit until the limit is reached, and as you make payments to pay off your outstanding balance, that money is added back into your borrowing limit. A Line of Credit has built-in flexibility. You can use any amount up to the credit limit whenever you have money available, but you do not have to use it all.
The Credit Karma Credit Builder Line of Credit can only be used to transfer money to your locked Credit Builder savings account.
How big is my Line of Credit?
Your Line of Credit is $1,000. This helps increase your overall credit limit, keep credit utilization low, and allow you to save up to $1,000 per pay period. Once you pay off any outstanding balance to your Line of Credit, that amount immediately becomes available to use and put money into your Credit Builder i savings account again.
What happens if I stop making payments?
If you stop making payments on the money you've transferred from your Line of Credit to your Credit Builder Savings Account, you may go delinquent, which could negatively impact your credit score.
How does this build credit?
Credit Builder helps you build credit by impacting the three largest contributors to your credit score: payment history, credit utilization, and account age. Credit Builder utilizes a Line of Credit to help you save money. Every payment you make to pay off the balance on your Line of Credit is reported as a payment to the Credit Bureaus. On-time payments to your Credit Builder strengthens your payment history and improves credit. The Line of Credit that comes with Credit Builder has a limit of $1,000, which increases your overall credit limit, gives your lower overall credit utilization, and builds your credit. And finally, the Credit Builder has no fixed term length, so you can keep it active as long as you want. The longer you keep your Credit Builder open, the longer your average account age will be and the more it helps your credit.