1. What is a Credit Strong account?
A Credit Strong account is the fusion of a secured consumer installment loan and a savings account. During the life of your Credit Strong account you build both credit history and savings.
2. How exactly does a Credit Strong account work?
When you open a Credit Strong account:
- Austin Capital Bank gives you an installment loan and places the borrowed funds in a savings account in your name.
- You do not receive the funds on day one, they are instantly deposited into the savings account
- A lock is placed on the funds in the savings account to secure the loan
- Each month you make a single, fixed monthly payment of principal and interest on the loan
- The principal portion of your loan payment is credited towards the lock on your savings account and the interest portion of your payment is how we cover the costs of providing the service to you
- During the term of your account we report your loan payment history to all three major credit bureaus and you earn interest on your savings account balance
- When the loan is paid in-full, the lock is removed from the savings account and the funds become available to you
You end up with payment history for an installment loan on your credit report, which accounts for 35% of your FICO credit score, and the money you’ve saved up in your savings account.
3. What is the total cost of my Credit Strong Account?
Below is a chart that provides more details:
Credit Strong Magnum
The tables above illustrate the first 24 months of each account type so you can easily compare the accounts.
- Loan Amount The total amount of the loan that will be deposited in your savings account. A lock is placed on the loan proceeds in the savings account to secure the loan. This is the loan amount reported to the 3 major credit bureaus.
- Admin Fee The amount of the non-refundable administrative fee charged at account opening that covers the cost of opening and activating your account.
- Loan Interest Rate: This is the interest rate charged on the loan. This is how we earn money to provide the service.
- APR: Annual Percentage Rate
- Sum of Loan Payments: This is the sum of the first 24 monthly loan payments, excluding the Admin Fee.
- Savings Progress: This is the approximate value of the funds available for withdrawal in your savings account if you have made all your loan payments on time, incurred no additional fees, and closed the loan at the earlier of; account maturity or 24 months. This amount does not include the interest earned on the savings account and closing your account early will diminish your potential ‘length of credit history’ which accounts for 15% of your FICO Score.
- Savings Interest Rate= 0.20%
4. Where are Credit Strong Credit Strong accounts available?
Credit Strong accounts are available in all states in the United States except for North Carolina, Wisconsin and Vermont.
Vermont: Deposit secured consumer lending is against the law.
Wisconsin: The state law requires spousal consent for consumer loans that we cannot accommodate in the online application process.
North Carolina: The state has very specific laws pertaining to lending to members of the military. We are working on a solution for offering accounts in North Carolina that will meet all these state specific requirements. We felt it was the right thing to do to not initially offer Credit Strong accounts in North Carolina versus offering accounts to North Carolina residents but excluding members of the military.
As an additional note, Credit Strong is the only deposit secured consumer credit building account for residents of New York that has been approved by the New York Department of Financial Services.
*As of February 19, 2019
5. After I open my Credit Strong account, what should I expect?
First, thank you for trusting Credit Strong to help you build strong credit and savings. Here’s what you should expect:
- You will receive your current FICO credit score in the Credit Strong credit dashboard within 2 weeks of opening your account. You will see the date of your next score refresh in the dashboard.
- Your first monthly loan payment will be due one month after you open your account. When possible , accounts are set up on auto-pay when opened. You can manually turn off auto-pay by going to My Account/Payments tab. We recommend that you set up auto pay so your payments are made on time.
- Typically your Credit Strong account will appear on your credit report 30-60 days after you make your first payment.
Note: We provide your payment information to the three major credit bureaus, but it can take them some time before they process the information and add the account to your credit report. Unfortunately, each credit bureau decides when your payment information is processed and reported on your credit report and we are unable to expedite this process for you.
- Remember the most important part of your credit building journey is to pay on time. Payment history makes up 35% of your FICO score so it is important to avoid any late payments on your Credit Strong account loan or it may harm your credit score.
6. What happens at the end of my Credit Strong account?
When you have paid your loan off in-full, you will receive a notice that your loan has been paid off and the lock related to the loan is removed from your savings account. You can leave your money in your savings account earning interest or request a transfer of the funds.
7. Can I pay back my Credit Strong account early?
Yes. There is no prepayment or early withdrawal penalty for paying down, or paying off, your Credit Strong account loan early.
You should be aware that payment history is the most important factor for your FICO credit score and by paying off your loan early you will reduce the number of payments reported to the credit bureaus, potentially reducing the positive impact of the Credit Strong account loan on your credit score.
8. Is Credit Strong legit? How do I know this isn’t a scam?
Credit Strong is a division of Austin Capital Bank. Austin Capital Bank is a 5-star rated FDIC insured Texas State Savings Bank, located in Austin, Texas. As an FDIC insured bank, Austin Capital Bank is subject to rigorous federal and state oversight and examinations on a regular basis by the Federal Deposit Insurance Corporation and the Texas Department of Savings and Mortgage Lending.
Read more at: www.creditstrong.com/about-us/
9. Can I have multiple Credit Strong accounts at the same time?
At this time you may only have one account open and active at a time. After you complete your Credit Strong account you may apply to open another one.
10. Can I make withdrawals from my Credit Strong account?
During the term of your loan a lock is placed on your savings account to secure the loan and the funds are not available for withdrawal. At maturity of the loan, or when the loan is paid off, the lock is removed and the funds in the savings account are available to you.
11. When will I receive the money from the installment loan?
Unlike an unsecured consumer installment loan, a Credit Strong account does not allow you to immediately withdraw the money at the time the loan is originated. Your loan proceeds are immediately deposited into a FDIC-insured savings account in your name at Austin Capital Bank. The loan funds are locked and not available for withdrawal until the loan is repaid in full. While the funds are held in the savings account you earn interest on the account balance. When the loan is repaid in full, the lock is removed and the funds are available to you.
The Credit Strong account is designed to help you establish or build your credit in a safe and reliable manner while also acting as a savings plan. If you need access to loan funds immediately, you should consider obtaining an unsecured consumer loan.
12. Can two people co-own or co-sign on the same Credit Strong account?
No. The installment loan and deposit account that combine to create your Credit Strong account are individual personal accounts. You may not have a co-signer or co-owner of either account. Additionally, you may not transfer ownership of either account while your Credit Strong account is active.
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Credit Strong is NOT a credit repair service and does not remove negative credit history from your credit profile. Disclaimer: Credit profile improvement is not guaranteed. Changes in your credit score reflect individually specific financial behavior and history. Failure to make minimum required loan payments on-time may result in your loan payment(s) being reported as delinquent to credit bureaus which may negatively impact your credit profile.
Testimonial Disclaimer: Individual results may vary. Unique experiences and past performance for individuals do not guarantee future results for other individuals. Testimonials may not be representative of all individuals and certain individuals may have inferior results than indicated in testimonials.
Credit Strong® is a registered trademark of Austin Capital Bank SSB. FICO® is a registered Trademark of Fair Isaac Corporation. Austin Capital Bank SSB. Member FDIC. Equal Housing Lender. © 2019 Austin Capital Bank SSB. All Rights Reserved.