Is Kikoff a good way to get credit?

When not making three-pointers, NBA star Stephen Curry wants to help you improve your credit score. He is an investor in Kikoffa new credit-building platform for Gen Zers and millennials.

How Kikoff works

Kikoff users receive a $ 500 line of credit that they can only use at the Kikoff Store. The cheapest way to get started is to sign up for the Kikoff Credit Service, which costs $ 2 a month. The online store also offers e-books for personal finance.

If you sign up for the $ 2 monthly plan, you only use a small fraction (less than 1 percent) of your $ 500 credit line, which is a very good credit line. Kikoff has basically designed a microloan system that is structured to showcase lending activity. It lists these credit lines at two of the three major credit bureaus (Equifax and Experian).

Using a Kikoff account responsibly, the company notes that customers can positively influence many key aspects of their FICO credit score, especially their payment history (35 percent FICO type), the amount they owe (30 percent) and account history (15 percent). It has hundreds of thousands of users and has raised $ 42.5 million in venture capital.

The competition

There is a large market for people who want to create or rebuild their credit scores. says FICO 79 million adults in the US have credit scores below 680 (which the company notes is “a common limit of acceptable lender credit”) and 53 million can not even be rated because they do not have enough information in their credit record. Combined, this means that about half of American adults have subprime credit or no credit at all. It is safe to say that there is a demand for credit products tailored to beginners and manufacturers.

Credit loans

In some ways, Kikoff is similar to credit line loans, which are essentially a form of forced savings that is structured to create credit because the monthly installments are reported to the credit bureaus. At the end of the term (maybe one or two years), the account holder can keep most of the money he or she has set aside, usually minus some interest and charges. Saving money on your own would be more economical and provide more liquidity, but would not immediately improve your credit score. This is why credit cards are targeted at certain individuals.

Credit cards

Another popular way to generate credit is to sign up for a secure credit card. The customer makes a deposit (often a few hundred dollars) that usually serves as a credit limit. The lender can keep the deposit if the cardholder defaults, but the idea is that the customer will use the card and pay the balance each month, in order to improve their credit profile enough to qualify for a traditional, unsecured credit card after six to 12 months (during which the issuer returns the deposit).

Assuming you pay your bills on time and in full to avoid interest and sign up for a card that does not charge an annual fee, a secure card is probably the best of these credit creation options because it has the widest utility. You can use these cards wherever the network of cards is acceptable (eg Visa or Mastercard). And they often refer to all three credit bureaus. The Capital One Quicksilver Secured Cash Rewards credit card is a good example. gives even 1.5 percent cash in every purchase.

There are also some unsecured credit cards that are specifically aimed at credit makers and restructurrs — such as the Visa Petal® 1 Free Annual Credit Card. Tomo credit card and Card X1Applying cash flow assumption. They do not pay much attention to your credit score. Many of their target customers do not even have credit scores. These companies are much more interested in the income and expenses of the applicants.

Their ideal customers have steady incomes and savings habits, but have fallen into the traps of the traditional credit rating model for one reason or another. Because of their detailed sponsorship practices, these three start-ups can potentially offer much higher credit limits than secure cards.

Alternative credit tracking services

Another way to improve your credit score is to sign up for an alternative credit tracking service, such as Experian Boost. Perch the eCredable Lift. The first two are free and the eCredable Lift costs $ 24.95 per year. Each one works a little differently, but the bottom line is that you can sign up to receive specific existing payment histories – which are not traditionally counted in credit rating types – embedded in your reports. Examples include rental, streaming services, utilities and more. These alternative credit tracking services offer significant benefits, possibly at no cost, with no real downside, as you can unlink your accounts if the plug-ins do not help your rating.

Corollary: Is Kikoff a good deal?

Not bad, but it’s not my first – or only – choice. There are other ways to create or rebuild your credit score that cost less money and offer a wider impact.

If you want more purchasing power while generating credit, then use Petal, Tomo or X1. If you are planning to spend a little but still want to buy things with a credit card and establish a relationship with a credit card issuer, then choose a secure card. If you want an instant, free way to improve your credit score, try Experian Boost or Perch. If you want to improve your credit score while putting some money aside, then a credit line loan is your best bet.

Maybe Kikoff could bring some extra benefits, but I would not put all my eggs in this basket. It may cost as little as $ 2 a month, but there is no evidence that your credit score helps more than these other strategies, and each one could either cost less or offer extra features — Sometimes, they can both.

Do you have a question about credit cards? Email me at [email protected] and I will be happy to help.

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