The credit-builder cards work like debit cards. They allow users to deposit money and make purchases|@creditsesame|X
Fintech companies like Chime Financial and Credit Sesame are offering cards that help people improve their credit scores without borrowing money.
These credit-builder cards work like debit cards, where users deposit money and make purchases. The fintech firms report some of these transactions as credit activity to credit-reporting companies, even though no actual credit is extended.
Traditional banks and credit-reporting companies are divided on these products.
Experian supports them, citing benefits for consumers and lenders, while TransUnion remains skeptical, noting that only a few cards meet its standards.
FICO is still evaluating their impact on credit scores, and VantageScore is working with the industry to integrate them.
Despite the mixed response, millions of Americans are adopting these cards to improve their credit, though results vary widely depending on the individual.