Kovar Capital: Apps to Improve Credit Scores


Hey Taylor - I recently read about apps that can help fix your credit score. I’m wondering if this is another scam or if it’s worth looking into.

Hey Meredith - I was just researching a few of these apps myself for a new client. From what I can tell, these programs aren’t meant to scam you. The effectiveness might be questionable, but I don’t think you have to worry about getting tricked or robbed.

Before you download a bunch of credit-fixing apps, you need to take stock of your financial picture and what really needs fixing. I talk with a lot of people who are like, “Man, I need to get my credit score up so I can get a loan with a good rate.” And my response is, “No, you need to deal with all those thousands of dollars of debt before you can borrow more.”

Depending on the state of your finances, some apps/credit-fixing efforts will make more sense than others. No matter what, don’t think that a good credit score is more important than paying off your credit cards and outstanding loans.

If you’re in a place where you have cash in the bank but need to get that FICO score back up because of a bad loan or a foreclosure in the past, something like SeedFi might help. This app uses Credit Builder Prime and essentially opens a savings account on your behalf. You have to commit to putting money into your SeedFi account every pay period, and the money you save is reported as a bill payment. Without actually spending money, SeedFi reports to the credit bureaus that you’ve made an on-time payment. Each pay period, your credit score will get a little nudge.

SeedFi stands out to me because it focuses on saving instead of spending (Credit Builder Prime is also free). Other apps help your credit in the more traditional way: they provide a small loan, you spend that money and pay it back, that info gets reported to the credit bureaus and your score improves. It’s the same thing that happens with timely payments to a credit card; the main difference is that other lenders are pickier about approval and might charge high interest and other fees because of a bad credit score. The main advantage offered by a lot of these apps, like Sable and Credit Sesame, is that you can get a secured card with a small balance and fewer strings attached.

Every point matters when it comes to your credit score. There are no instant solutions, but these credit apps can definitely give you a boost. I hope you find one that works, Meredith!