What is Ava Credit Builder?
The Ava Credit Builder is a financial product backed by Evolve Bank designed to help individuals establish or improve their credit scores by leveraging recurring payments and savings strategies. It caters to individuals struggling with traditional credit-building methods and provides innovative tools to support credit growth.
Ava offers two primary products—the Ava Credit Card and the Save and Build Loan. Both are designed to report credit activity to the major credit bureaus (Experian, Equifax, and TransUnion), helping users build their consumer credit profiles.
The Ava Credit Card focuses on recurring payments, such as subscription services, while the Save and Build Loan is a secured credit-builder loan that helps users save while enhancing their credit.
Improving consumer credit is particularly valuable for small business owners, as most commercial lenders evaluate their personal credit scores to determine loan eligibility.
Understanding Credit Scores
A credit score is a numerical representation of an individual’s creditworthiness, influenced by several factors:
- Payment History (35%): This factor reflects your track record of making timely payments, which is crucial for demonstrating reliability to lenders.
- Credit Utilization (30%): This measures the ratio of your current revolving credit balances to your total credit limits, indicating how much of your available credit you are using.
- Length of Credit History (15%): This considers how long your credit accounts have been active, with longer histories generally viewed favorably.
- Credit Mix (10%): This assesses the variety of credit types you have, such as credit cards, mortgages, and installment loans, showing your ability to manage different forms of debt.
- New Credit Inquiries (10%): This tracks the number of times lenders have requested your credit report when you apply for new credit, with too many inquiries potentially signaling risk to future lenders.
The Ava Credit Builder helps improve two of the most significant factors—payment history and credit utilization. Users can establish a strong credit history by ensuring consistent, on-time payments with the Ava Credit Card and Save and Build Loan. The Ava Credit Card also allows users to maintain low utilization rates by focusing on fixed expenses, like subscriptions.
Importantly, Ava doesn’t require a hard credit check to apply, meaning it won’t negatively impact credit scores during the application process.
How does the Ava Credit Card work?
The Ava Credit Builder Card is a unique credit-building tool. Unlike a traditional credit card, it doesn’t charge interest or late fees and operates on a fixed monthly membership fee.
Users link their bank accounts and designate recurring automatic payments, which Ava then reports credit account activity to all three major credit bureaus to establish a positive credit history.
Credit Limit
While Ava advertises a high credit limit, it caps at $2,500. This limit is significantly higher than most credit-builder cards, which typically range between $500 and $1,000. However, it’s still modest compared to traditional credit cards with higher limits.
Spending Limitations
Unlike many other credit cards, Ava restricts the categories in which credit can be used. It’s mainly intended to pay subscriptions for approved services or purchases from an Ava store.
Some popular subscriptions eligible for the Ava credit card include:
- Netflix.
- Hulu.
- Amazon Prime.
- Walmart+.
- YouTube Premium.
- Verizon.
- Spotify.
- PlayStation Plus.
- Xbox Live.
- And more.
Repayment
Payments to Ava are due seven days after each subscription payment is made. Timely repayments positively impact credit scores, while missed payments are reported to the bureaus, potentially lowering scores. This mechanism emphasizes the importance of financial discipline.
Costs
The Ava Credit Card doesn’t charge interest or hidden fees. However, it requires a membership fee of $6 per month for an annual plan or $9 per month for a monthly plan. These fees are competitive with those of other credit-building products.
Pairing Products
The Ava Credit Card can be paired with the Save and Build Loan for accelerated credit improvement, offering users a multifaceted approach to credit growth.
How does the Ava Save and Build Loan work?
The Ava Save and Build Loan is a secured credit-builder loan that enables users to save money while building credit. Unlike traditional loans, the borrowed amount is held in a savings account until the term ends.
One Year Term
The loan has a one-year fixed term, providing a structured timeline for credit improvement.
Monthly Payments
Users deposit monthly payments ranging from $25 to $100 into a savings account. Ava reports these payments to the three major credit bureaus, enhancing payment history. However, missed payments or early withdrawals before the loan term ends can result in adverse credit reporting.
Access Your Savings
Users can access their accumulated savings at the end of the loan term, offering a financial reward for their disciplined credit-building efforts. This presents a unique opportunity to build credit while saving for the future. You can collect all your money after the final payment.
How do I apply for Ava Credit Builder?
Signing up for Ava Credit Builder is straightforward. Follow these steps to apply.
Step 1: Visit the Ava Website or Download the App
Go to the official Ava website at meetava.com or download the Ava app on your smartphone. It’s free on iOS and Android platforms. After downloading, launch the app and start the registration process.
Step 2: Choose Your Product
Select whether you want to apply for the Ava Credit Card, the Save and Build Loan, or both.
Step 3: Create an Account
Sign up by providing basic personal and financial information such as your name, address, and bank account details to register for a new user account. There is no credit check, so your credit score is never in jeopardy. This seamless, user-friendly experience allows for immediate account creation.
Step 4: Choose Your Membership Plan
After initializing your account, you choose a membership plan based on your financial capabilities. Ava offers two options: a $6 per month fee with an annual commitment or a $9 monthly fee without a long-term commitment.
Step 5: Monitor Spending and Payments
Your credit limit on your Ava Credit Builder Card is based on your regular spending habits. Usually, you should get a $2,500 line of credit, but there are limits on where you can use it.
Plan your spending strategically to get the most value. Pay all your bills through the Ava app on time with Ava Credit Builder, and Ava reports to all three credit bureaus within 48 hours. This form of timely reporting is essential to calculating your credit score.
Step 7: Track Your Progress
Monitor your credit score progress with the Ava app. Ava Credit Builder has helped an average of 74% of app users improve their credit scores.
What are the benefits of Ava Credit Builder?
The Ava Credit Builder products offer significant advantages for individuals looking to improve their credit scores. Ava helps users establish a positive credit history without the risks associated with traditional credit cards by focusing on recurring payments and disciplined financial habits.
The products are accessible, with no hard credit checks required, and provide clear paths for credit growth. Reporting to all three major credit bureaus ensures maximum impact on credit scores, while the combination of savings and credit-building helps users achieve their financial goals effectively.
What are the drawbacks of Ava Credit Builder?
Despite its benefits, Ava Credit Builder products have limitations. The credit card’s spending restrictions may not suit everyone, as it limits purchases to subscriptions or Ava store items.
Additionally, the membership fee could deter individuals seeking completely fee-free options. Finally, the Save and Build Loan requires a long-term commitment, and missed payments can harm credit scores, which may pose challenges for some users.
Ava Credit Builder Pros & Cons
Pros:
- Helps build credit through recurring payments and savings strategies.
- Reports to all three major credit bureaus, ensuring maximum impact.
- No hard credit check required to apply.
- Affordable membership fees compared to other credit-building products.
- No interest charges or hidden fees.
- Combines savings and credit-building for dual benefits.
Cons:
- Spending limited to subscriptions and purchases from the Ava store.
- Membership fees may deter those seeking free options.
- Save and Build Loan requires long-term commitment.
- Missed payments can negatively impact credit scores.
- Might not improve severely damaged credit.
- Does not offer a business credit building option.
Frequently Asked Questions
Here are the most common questions about the Ava finance.
Is Ava Credit Builder legit?
Yes, Ava Credit Builder is a legitimate credit-building tool. While it is not Better Business Bureau (BBB) accredited, the company is verified on Trustpilot, where it has a rating of 4.8 out of 5 with over 1,660 reviews.
Does Ava help Build Business Credit?
No, Ava focuses exclusively on improving consumer credit. It does not directly help with building business credit but can indirectly benefit small business owners by improving their personal credit scores.
How much does Ava raise Credit Scores?
The impact of Ava on credit scores varies by individual, depending on their starting profile and financial habits. Users report significant improvements on average, with some achieving increases of over 50 points. However, results can range from minor changes to substantial gains, depending on factors like payment consistency and credit utilization.
Can improving Personal Credit help with Small Business Loans?
Yes, improving personal credit can significantly enhance eligibility for small business loans. Many lenders assess business owners’ personal credit scores when evaluating loan applications. A higher credit score can result in better loan terms, lower interest rates, and increased approval odds.
Are there Business Loans for Bad Credit?
Bad credit can limit financing options, but business owners can still access bad credit business loans through alternative lenders. These loans typically have high interest rates and shorter repayment terms and require more frequent repayments, making them a risky solution.
On the other hand, most bad credit business loans come from online lenders that offer quick and easy applications with fast funding. Some credit-challenged business owners use bad credit business loans as short-term financing to cover an urgent funding need while improving their credit to qualify for more advantageous business loans.
Ava Credit Builder Review – Final Thoughts
Ava offers a convenient, user-friendly, and low-cost way to help improve consumer credit scores. It can be a valuable option for those with limited credit histories trying to build payment history and keep credit utilization low.
While it doesn’t offer business credit-building options, small business owners can still benefit as many lenders consider your personal credit score for business loans. However, the services may not have a significant impact on severely damaged credit scores, such as those impacted by loan defaults, mortgage foreclosures, or high credit card debt.
Contact us if you have more questions about improving credit or to apply for a small business loan. Our alternative financing experts can help you find the best business funding solutions for your needs and credit score.
