What is Credit Building?
KOHO Credit Building is a feature that helps you build or rebuild your credit history through a secure line of credit that reports your payment activity to Equifax. A line of credit is a set amount of money you can borrow from and repay over time. In this case, it's a $225 credit that helps build your credit history.
How is KOHO Credit Building different from a secured credit card?
Unlike secured credit cards that require a security deposit and charge interest on purchases, KOHO Credit Building:
Does not require a large upfront deposit
Does not have interest charges on purchases
Is not a credit card, but rather a line of credit designed specifically for Credit Building
Reports monthly to Equifax
If I already have good credit, is KOHO Credit Building still useful?
If you already have good credit, KOHO Credit Building may still be beneficial by:
Adding to your credit mix (if you don't already have a line of credit)
Creating additional positive payment history
Contributing to your credit health
Does KOHO Credit Building affect my credit utilization ratio?
Utilization rate is the percentage of your available credit that you're using. For example, if you use $22.50 of your $225 credit, your utilization rate is 10%.
KOHO Credit Building also doesn't impact your credit utilization ratio, as it's not a revolving credit product like a credit card.
How do I sign up?
You only need to meet two requirements:
Make sure your KOHO account is fully verified.
Have enough in your account to cover the subscription fee (not including your Vault).
To sign up, open your KOHO app, go to "Credit," select "Credit Building" and click "Register" to start building your credit history 🎉
How does KOHO's Credit Building feature work?
When you sign up for Credit Building:
Once you register, you'll get a $225 line of credit without any interest. A line of credit is an account that will appear on your credit report. It’s completely separate from your available KOHO balance.
Your subscription automatically renews, so no need to worry about having to do that yourself. Just make sure you have enough money in your KOHO account each month to cover the subscription fee.
Each month on your billing date your utilization rate resets to 0%, so you'll need to reset it yourself in the app. Learn more about how to set your utilization rate here.
It’s best to keep it at 10% or lower. We'll take the amount you set as your utilization rate and report this activity to Equifax. Then we’ll put it back into your line of credit. This process keeps going every month as long as you’resubscribed.You’ll see this as a Credit Building charge in-app!
What is the KOHO Credit Building subscription fee?
The cost of KOHO Credit Building depends on your KOHO plan:
Essential plan: Standard pricing
Extra plan: 30% discount
Everything plan: 50% discount
For details on exact pricing based on your current plan, open the KOHO mobile app and navigate to the Credit tab.
How does using Credit Building initially impact credit scores?
Opening new credit accounts, even Credit Building products, may initially cause a temporary decrease in your credit scores due to a new account impact.
Making payments on time is so important for strong credit scores. Make sure you have enough money in your KOHO account to cover any withdrawals. If you've missed payments outside of KOHO, like missing car payments or credit card bills–trying to get more credit too quickly, or not paying back loans may also impact your credit scores.
Do I get any other benefits with Credit Building?
With Credit Building, you have access to our in-house Financial Coach. To speak with a financial coach, open the KOHO app, open a support chat, type your question, and include #coach at the end of your message. They can give you guidance on budgeting and saving.
Plus, you'll have access to your Equifax Credit Report, which gives you a daily view of your borrowing and payment history. This helps you track your progress and see ways to improve your credit scores.
Can I cancel KOHO Credit Building at any time?
Sure, you can cancel any time. Just follow these steps:
Go to the Credit Building page.
Click on "Credit Building."
Tap the ⚙️ icon for "Manage."
Select the three dots (...) in the top right corner.
Choose "Cancel Credit Building."
You'll need to settle any outstanding fees or withdrawals to cancel this feature, and we can't give any refunds.
A heads-up: To minimize the effect on your credit history, your line of credit will stay open for 12 months after cancelling your subscription. Keeping the account open for 12 months helps maintain your credit history length, which can positively influence your credit score