Building credit can be a difficult process, and many apps and products promise to help users improve their credit scores. But most of these credit-building options offer help at a high cost. Kikoff, on the other hand, charges no interest and no fees. And it immediately approves people for a $500 line of credit, provided they meet some basic criteria.
The only downside to Kikoff is that it only reports to two of the three credit bureaus and the line of credit can only be used in Kikoff’s digital store. Is this interest-free loan worth it? We explain the pros and cons of this product so that you can decide whether to use it.
Customers get immediate access to a $500 line of credit. Use the credit to purchase e-books and other low-cost digital products from Kikoff’s digital store. Pay no interest or fees and pay off the credit line in a few months. Kikoff reports to Experian and Equifax
What is Kikoff?
Kikoff is an online lender dedicated to helping people build and rebuild their credit. The San Francisco based lender was founded in 2019 and does not operate like a normal lender.
The company does not provide conventional loans. Instead, it extends most applicants $500 lines of credit. The line of credit can be used to purchase digital products in the Kikoff store. While Kikoff’s “members” pay their loans in installments, they pay no interest or fees. Kikoff earns its money from the digital products it sells in the store.
Kikoff reports all payment history to two of the three major credit bureaus, Experian and Equifax. This can help customers who pay on time build their credit.
Unlike most lenders, Kikoff approves all citizens and legal residents of the United States who are over the age of 18. This means that everyone can have the opportunity to build their creditworthiness.
What does it offer?
Kikoff is a lender that wants to make credit building accessible to more people. It does not make any money from its lending products. Instead, it offers interest-free loans to people to buy digital products on its store. By reporting the transactions and payments to the credit bureaus, Kikoff helps people build credit.
No credit draws
Anyone who meets Kikoff’s membership criteria (legal resident of the United States, Social Security number, age 18 and older, etc.) will receive a $500 credit to use at the Kikoff store. The company does not draw user credit, so applying for the new loan does not hurt and does not help the credit.
No membership fees
People who join Kikoff are called members. Members are not required to pay any fees, but they are eligible to shop at Kikoff’s digital stores.
Instant access to a $500 line of credit
All Kikoff members get instant access to a $500 revolving credit. While you can pay a huge bill for self-help ebooks, that’s not the point. By offering a $500 line of credit, Kikoff helps users keep their overall credit utilization low. Most people will buy only $10-$20 worth of products. That means a customer’s credit utilization will be below 5% in most cases.
Use the line of credit to buy digital products
The Kikoff credit line can only be used in the Kikoff store. Members can purchase digital products (usually e-books) focused on financial literacy and general wellbeing. If you’re hoping to use the loan to buy something you need, look elsewhere. Members can only purchase digital products such as e-books from the Kikoff store.
No interest or costs on the loan
As soon as you buy a digital product, you can pay off the loan in installments. Loan payments can be as low as $1 per month. If you buy a $10 book, you’ll pay $1 per month for ten months. There are no additional charges, even if you pay late.
Must have a Social Security number to open an account
Kikoff is technically open to most citizens and legal residents of the United States, but customers must have a Social Security Number to open an account.
Payment history reported to two major credit bureaus
Kikoff reports payment history to Experian and Equifax, two of the major credit reporting agencies. It does not report to Transunion. This means that people who use Kikoff do not build up a credit history with Transunion. This may mean that a person may struggle to take out new loans in the future.
Are there any costs?
Kikoff does not charge any fees to its customers. However, you must purchase a digital product from the Kikoff store for Kikoff to report your credit usage to the credit bureaus. Digital products cost between $10 and $20 per product.
The products in the Kikoff store are self-help products focused on financial literacy, investing, trading, entrepreneurship, and other financially adjacent topics. Kikoff makes money when people buy these digital products.
How does Kikoff compare?
Kikoff’s business model is hard to compare to most credit builder accounts. With a $500 line of credit, most people who make regular purchases will see their credit score grow with Experian and Equifax. However, the company does not report to Transunion. That’s a huge gap that Kikoff doesn’t explain enough. People using Kikoff may see improvements in ‘VantageScore’ credit score. But this amounts to a vanity statistic if it does not result in the ability to borrow money at cheap rates. Many people may think that their credit score is growing, but they may not be borrowing money from real lenders when the lender gets their credit report from TransUnion.
In contrast, other credit-building loans are much more expensive. For example, Self has interest rates ranging from 14-15%, but borrowers will build credit at all three credit bureaus.
Kikoff’s model seems great in theory. Providing interest-free financing for digital products ensures that Kikoff makes money and that people build credit. In practice, cheap credit-building loans are probably better options.
How do I open an account?
Kikoff is available in all states except Delaware, Indiana, and Nevada. Citizens and legal residents of 18 years or older can create an account by downloading Kikoff from the App Store or the Google Play Store.
If you prefer, you can also sign up through the Kikoff website.
After providing and confirming your email address, you will need to provide basic information so that Kikoff can determine if you meet the requirements. Once the basic information is cleared, you will become a Kikoff member and gain instant access to a $500 line of credit.
The line of credit can only be used in the Kikoff store.
Is it safe and secure?
Kikoff uses encryption and multi-factor authentication to keep user data safe. While the company cannot guarantee your data security, it is held to the standards of all lenders. Banks are held to some of the highest standards of data security, so users who are comfortable with online banking can probably feel comfortable using Kikoff.
How do I get in touch with Kikoff?
For basic questions about the product, please visit Kikoff’s detailed support portal. The portal provides essential information about opening and managing accounts.
Customers can contact Kikoff Customer Support by emailing help@Kikoff.com.
Kikoff can also communicate with customers via SMS or email.
Is it worth it?
Kikoff has a high-quality proposition. For $10-$20 (paid over the year), you can improve your credit score at two of the three credit bureaus. On the one hand, it seems like a no-brainer. The costs are minimal in relation to the benefit.
However, I am concerned that people will overestimate the expected benefit of using Kikoff. Auto and home lenders review credit reports from all three credit bureaus, and a huge difference in scores will raise red flags for the lender. Using Kikoff for a year will not be enough to help most people qualify for car or home loans.
But Kikoff can be a good credit launching application. With credit history at two bureaus, a Kikoff user may be eligible to open a real credit card with a traditional lender. Then the person can use that card to build up credit at all three bureaus.
Limited to their own stores
Web/Desktop Account Access
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