Is Chime credit builder legit? Let's find out!

For others, automatically owning a credit card means bad debt.

However, it only means one thing. A payable that you need to commit to paying or else could affect your financial standing.

There are multiple financial technology (Fin-Tech) companies today that aim to provide credit card services with a wide array of benefits to their users. Among other things, but have you ever heard of Chime?

More importantly, is Chime credit builder legit? What is Chime used for, and is there a catch?

Chime claims that it helps anyone build credit from scratch and boost their credit score. So how will this card help you build credit without taking on debt?

All of these questions and more. Read on to find out!

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What is Chime?

App Store Rating: 4.8 out of 5 | Play Store Rating: 4.6 out of 5

Chime is one of the most notable neobank or fintech companies that offer credit card services for free.

It takes pride in its $0 requirement in security deposits, no credit check, and no interests applied. Unlike most secured credit cards, they also have zero late fees, zero monthly/annual fees, no overdraft fees, no foreign fees, and other hidden fees.

As an online-only bank, Chime doesn’t have any physical branches or ATMs of its own.

It was launched initially as an alternative to traditional banks back in 2013, and nine years later, Chime has over 12 million customers.

Features

Checking/Spending Account

If you're looking for a bank account, should you consider banking with Chime?

Well, consider this first account they offer. The Spending Account is like you good ‘ole regular checking account. They made it a point to offer zero fees for low balances, maintenance, and even overdrafts.

Supposed you spend more than you have in your account, Chime will cover the difference starting at $20 and escalating up to $200 or more based on your account activity. But, you'll pay off the overdraft with your next deposit. So it's like a cash advance feature sort.

They called it the SpotMe overdraft protection (without any additional overdraft fees). So if you receive total monthly direct deposits of $500 or more, you can use this fee-free overdraft protection option.

In addition, if you use Chime for your direct deposit transactions, Chime will make your paycheck available up to two days early.

Then, if you want to get access to the Chime Credit Builder, you need to have a checking or spending account first. So opening this account is crucial. Moreover, all these three accounts that Chime offers are interconnected.

Let's see how.

Chime Savings Account

The Chime Savings Account also comes with a debit card.

A remarkable feature is that Chime will round up your savings to the nearest dollar and deposit it into your savings every time you purchase with it.

Therefore, this feature is excellent for automating their savings and looking for ways to save more money.

In addition to automated savings, Chime also has a Save When I Get Paid Feature.

This feature lets you automatically transfer 10% of each deposit or your funds into your savings account.

Unlike some online accounts, Chime doesn't make it easy to set specific savings goals or to personalize your accounts by purpose further. Moreover, you cannot deposit money directly into your Chime Savings Account; it has to be funneled through your Spending Account.

Hence, we mentioned earlier that all of them are connected.

As of this writing, the Chime Savings Account offers up to 0.5% APY with access to 85,000+ free ATMs.

Chime Credit Builder

Now let's talk about credit.

A good credit score is all you need to get the best loans and other financial perks from banks and lenders, 

It determines your credit risk or overall financial capability to pay debts and other dues on time.  

If it’s your first time and you’re after building your credit history and boosting your credit score, this would be the perfect free-of-charge secured credit card for you.

What does a secured credit card mean?

Essentially, a secured credit card is like putting in a security deposit beforehand. However, unlike most traditional banks that specifically assign a credit limit on your credit card, it will depend on the amount you deposit to your Chime account.

Think of it this way. It resembles a prepaid card, wherein you load a fund first before you get access and spend your funds. Then, the amount you deposited is a guaranteed amount that Chime will use to pay for your expenses (using the credit card).

Then, Chime reports this payment to credit agencies as complete and on time. Thereby increasing your credit score.

So is Chime credit builder legit shouldn’t be a question anymore. Why?

It's because Chime reports directly to three major credit bureaus such as TransUnion, Equifax, and Experian that determines your credit score.

The amount transferred from your Chime Spending Account to your Chime Credit Builder determines the limit you can spend with your card.

In short, you’re the one who sets your own credit limit. This app also has other features like the Safer Credit Building and Move Your Pay, which aim to lessen your worry about paying dues and transferring funds.

If used correctly, Chime can add up to thirty points to your credit score after your first month.

Therefore, if you have poor banking history or low credit score, Chime Credit Builder is legit and could help.

Chime Credit Builder on Fees

As mentioned, since Chime is a type of neobank or online-only bank, they made it easier on fees. We all know that the rise of digital banks has revolutionized the way people manage their finances.

Hence, Chime made it easier (because they don't have a physical location to lease and maintain, plus other operating costs). As a result, you don't have to worry about any of these:

• Monthly fees for account maintenance.
• Minimum balance requirement.
• Foreign transaction fees.
• Opening deposit requirement.
• No payment to send paper checks with Chime Checkbook.
• Zero ATM fees when you use in-network ATMs.

Yes, $0, nada! Moreover, you can withdraw cash from more than 85,000 fee-free ATMs in the U.S. through MoneyPass and Visa Plus Alliance ATMs.

However, if you use an out-of-network ATM, you will be charged a fee by the provider. You'll also have to pay a cost to deposit or withdraw cash at a Green Dot shop over the counter – Chime charges $2.50 for withdrawals, and you may have to pay a Green Dot fee of up to $4.95 per transaction.

Credit Score

Since we talk a lot about credit scores and everything, it makes sense to know what it exactly. Further, what makes up your credit score? Is Chime Credit Builder legit?

Payment History (35%)

Get a credit card, then always pay off on time and in full!

Amounts Owed (30%)

Make small purchases and never max out your line of credit.

Length of Credit History (15%)

Keep your oldest account open.

Type of Credit Used (10%)

Apply for different types of loans over time, slowly.

New Credit (10%)

Don't open too many new accounts at one time.

Most significantly, a good credit score can help you buy a home, start a business, or get a car loan.

A credit score is between 300-850 and shows lenders how likely you are to pay back a loan based on your credit history. The higher the score, the better a borrower looks to potential lenders.

Additionally, a credit score is based on credit history: number of open accounts, total levels of debt, repayment history, and other factors.

Lenders use credit scores to evaluate the probability that an individual will repay loans promptly. Hence, as young as you are, you can start building a line of credit.

And you can do so with Chime Credit Builder.

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What is the credit limit on Chime?

One way to avoid getting stuck in grave debt is by ensuring that you do have enough money to pay it off in the first place.

This is the main idea behind Chime’s credit limit.

The money you transfer from your Chime Spending Account, your standard bank account with Chime, to your Chime Credit Builder secured account is the only amount you can spend using the credit card.

It sets your credit limit, and you need to do this pre-loading process to start using the card and ensure that you have the funds to pay for your transactions.

The credits you build using this service are the same as the other available secured credit cards.

It means that you would need to deposit money into the card to use it, which will be the basis for your credit limit.

Hence, it never keeps your money from you, and the risks are within your own hands, as any amount deposited can be considered your credit limit. 

Does Chime Credit Builder actually build credits? 

A simple answer to this question is YES. Having a Chime account builds your credit history and boosts your credit score. 

You can use this credit card for many different transactions, provided that you do have its credit limit already set based on your deposited amount.

Doing so would help you avoid late payments and outstanding balances, ultimately boosting your credit score. In addition, the deposited amount through Chime Credit Builder can be automatically selected to pay said bills.

Freedom to deposit when you want with no restrictions to any amount is what Chime offers, all while building your credit score and reputable credit history.

It’s one of the most helpful security cards that there is right now for building credit score and credit history to transition for a better credit card option and other financial advantages in the future. 

But you must know, especially if you're a first-timer, that using this financial tool, in particular, can potentially hurt your credit score as well.

Moreover, you may want to start using small amounts of the transfer only if your very purpose for having one is to build a credit history or boost your credit score.

Therefore, you should maximize Chime's excellent features and use them responsibly according to your advantage. So it always has ‘reserved’ money to use for dues and other payments.

Can Chime hurt your credit? 

First, let us understand the four (4) reports that Chime submits to the three (3) major credit agencies for review:

• Payment status – which contains information on whether you could pay your previous monthly balances or not.   
• Amount past due – is the amount you couldn't pay the previous month.
• Account age – indicates the number of months since you’ve had your Chime Credit Builder in active use and lastly;
• Current balance – which is the total amount you've spent so far since your last payment and the remaining past dues, if there's any.

But among the unreported data that tends to change depending on the user is credit utilization. Furthermore, it is the ratio of your outstanding credit card balances to your credit limit since, as mentioned, the deposits determine your credit limit.

Since credit utilization varies per person (a contributing factor in credit score) a good numbers according to financial experts is that you should maintain a credit utilization ratio of below 30%. It means that if your credit limit is $10,000 your revolving balance should not exceed $3,000.

It's very inconsistent and cannot be the basis of factual information.

With this, what happens is it creates confusion with the credit bureaus' system and leads them to misreport your credit balance, ultimately affecting your credit score.

In simple words, if you deposit a total of $100 which sets your credit limit to $100, and you have decided to spend and use up the whole amount by the end of the month, it will reflect a balance of $100 that you must pay before you use the card again.

If not, this will automatically increase the amount of your credit balance by $100, and as you know, as your credit balance increases, it also affects your credit score. 

 Of course, there is one way to avoid this: making another $100 deposit, so it doesn’t reflect as a credit balance by the end of the month. 

If you happen to decide that the continuous bad credits are no longer helping and would like to end, rest assured that you still get to keep your money back.

By closing an account with Chime, you have the privilege to refund your deposit in the total amount provided that the account is in good standing. 

Do I have to pay back Chime Credit Builder? 

Again, the credit limit in using this secured credit card is based on the amount you deposited.

It ensures that you have the available money to pay off your debts. However, let us consider the other payment dues that you also have to prioritize.

How do you go about it? Do you have to make a separate payment for that?

Luckily, Chime Credit Builder has a feature for this particular purpose. Therefore, all you need to do is activate the Safer Credit Building that allows Chime to use the money you’ve recently deposited to pay any dues.

So the app holds your money and takes care of your monthly dues for you, and the remaining amount serves as your cash for disposal, which sets your new credit limit. 

Move My Pay is among its other features, too, where you choose any amount to be transferred on your Chime Spending Amount whenever you get paid, which lessens the hassle of needing to move money regularly.

It ensures that you have money to pay those said dues before getting your new credit limit.

Chime Credit Builder: PROS AND CONS

The Good	The Catch (is there?)
Minimal fees	Limited banking services
Automatic savings options	Potential scammers because of how lenient and easy it is to open and have an account.
Helps build credit from ZERO and boost credit score	No joint accounts and budgeting tools
Easy to get started
Allows you to build healthy financial habits such as disciplined savings and credit

Is Chime Credit Builder Legit?– Final thoughts

Chime is not your traditional fintech service provider. It’s free yet provides a quality service that redirects you towards the right path to your financial goals.

To enjoy its benefits, one should have a Chime Spending Account first.

No worries if you’re a first-time credit card user, as it does not do credit checks at all. Then, load up the Chime Credit Builder so you can start using the credit card for everyday purchases based on your deposit.

So no more missed payments with the Safer Credit Building, and Move Your Pay will lessen the hassle of transferring money. In addition, these all come free of charges, fees, and interests that attract a lot of first-timers.

It’s essential to build up your account little by little to ensure that you are getting the most benefits from the credit score you earn and avoid any possible risks.

As you build your profile and ensure a good façade with the major credit bureaus, you can even earn some cashbacks and other better credit card options in the future.

Credit utilization is a probable drawback to some, but as long as you are responsible enough to pay any pending balances before the end of the month, you’ll be fine.

It has more pros than its cons, so if you’re looking for a way to build your credit history and boost your credit score, try this app and see for yourself: Is Chime Credit Builder legit? 

Our verdict, YES!

So if you want to start building credit for free without accumulating debts, try Chime Credit builder today.