Kikoff Review: A credit-building product for only $5 per month

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When Kikoff co-founder and CEO Cynthia Chen moved from China to the U.S. to attend college, she noticed how many of her peers had credit cards while she did not. After realizing how important it was to have a good credit score to secure loans — and good terms on those loans — she signed up for a secured credit card and managed to maintain a credit score above 700 throughout college.

Chen later founded Kikoff in 2019 to help those who lack credit histories or have poor credit scores.

"When I was working in consumer finance at different financial institutions, I noticed that there were a lot of people who were like me who didn't have the most affluent family background," Chen says. "I realized that there was a pretty big gap in servicing this population because the existing solutions in the industry were very expensive."

Below, CNBC Select takes a closer look at how the Kikoff Credit Account works, as well as some other options for people interested in building their credit scores.

Kikoff is a credit-building product that offers consumers a $750 revolving line of credit without charging any interest or fees on the credit line. Users then use this line of credit to purchase an item from the Kikoff proprietary store.

By using the Kikoff line of credit and purchasing an item from their store, users will have a Kikoff credit account that gets reported to all three major credit bureaus, Equifax, Experian, and TransUnion. This can, in turn, help people boost their credit scores.

The store items start as low as $10 and include financial literacy eBooks, eCourses, and Credit Account subscription renewals. Users are only required to make a minimum monthly payment of $5.

Kikoff secured credit card

In addition to the credit building account, Kickoff offers a secured credit card. The card doesn't require a credit check, has no annual fee, 0% interest and a low minimum deposit of $50. It reports to the three major bureaus to help you build your credit score.

The Kikoff Secured Credit Card works similarly to a debit card and checking account in that you're able to both spend and deposit funds. If you deposit over $500 each month you'll qualify for overdraft protection starting at $20, which can increase over time. If you set up direct deposit, you can have your paycheck up to two days earlier.

The intention behind the Kikoff Credit Account is to help users improve their FICO® Score. Five factors make up your FICO credit score: your payment history (35%), the amounts owed (30%), the length of your credit history (15%), new credit (10%) and the credit mix (10%).

Since FICO reports your on-time monthly payments to the major credit bureaus, using Kikoff would help improve your payment history. However, if users do not make their minimum monthly payment on time, they then have 30 days beyond the due date to make a payment before the missing one is reported. Kikoff will not sell customers' delinquent loans to external collection agencies.

The Kikoff credit line also helps users maintain a low credit utilization ratio, which experts traditionally recommend keeping between 10% and 30%. Plus, Kikoff can help to improve the length of your credit history since users can keep the line of credit open even after they've finished purchasing items and paying them off — there are no fees associated with keeping a Kikoff line of credit open indefinitely.

Compare credit repair options

Kikoff's main benefits will appeal to you if you're trying to build your credit score through small but consistent payments. Kikoff offers you access to a line of credit, as well as some additional features, depending on your membership plan.

• Pause Feature: Users have the option to pause their required monthly payments to their Kikoff Credit Account for one to three statement periods. You can pause once per 12 months, and a maximum of two times over the account lifetime.
• Credit score disputes: Kikoff Disputes helps you identify potential inaccuracies in your Equifax credit report. The service will auto-generate a dispute letter, and you can either mail it yourself for free, or have Kikoff mail it for you for a $1 fee (waived for premium members).
• Rent reporting: Users can link the bank account they use to pay rent to Kikoff, and each on-time (not late) rent payment will be reported to Equifax. The rent reporting feature is only available with Kikoff Premium and Kikoff Ultimate.
• Debt relief: If you have eligible debt, you can start a savings bucket within Kikoff to collect funds, and, with your permission, Kikoff will contact your collector and attempt to negotiate a reduced offer. You can accept or decline and then set up the payments from your savings bucket to pay down your debt.
• Credit builder loan: An optional addition to your line of credit, the Kikoff credit builder loan costs $10 a month. Kikoff collects and reports your payments, at the end of 12 months, you can withdraw the $120 you deposited. The credit builder loan is not available to customers in Hawaii, Indiana, Oregon, and Wyoming.
• Identity theft and data protection: With the Kikoff Ultimate plan users will also receive personal data protection and identity theft insurance.

According to Kikoff, users with credit scores below 600 see their scores improve by 58 points with consistent, on-time payments during the lifetime of the account.

You can choose from three membership plans:

• Kikoff Basic: $5 per month
• Kikoff Premium: $20 per month
• Kikoff Ultimate: $35 per month

The Premium plan has all the services of the basic tier, like credit reporting and financial insights, with an additional rent reporting feature. Ultimate tacks on identity theft and data protection.

Kikoff can be great for building up lower credit scores as both the credit account and the secured card have no annual fees and an APR of 0% which means you won't be charged interest. The secured card also has no foreign transaction fees.

Kikoff does not perform a credit check to determine approval — you just need to be a U.S. citizen with a Social Security number. To verify your identity, Kikoff will perform a series of fraud checks before you're approved. The service is available to residents of all 50 states.

Compare debt relief options

While Kikoff is a relatively affordable option to build credit — using the service generally costs under $10 — there are several other credit-building products and methods that might be cheaper or provide more utility, or could even work in tandem with Kikoff. Here's a look at three of the alternatives to using a service like Kikoff.

1. Using Experian Boost®

*Experian Boost® is a free service that uses consumers' on-time utility, telecom and streaming subscription payments to calculate their FICO® Score. By having their Netflix or water bill payments reported, consumers can see their credit scores improve based on monthly payments that are not traditionally used to calculate a credit score. Note that to use Experian Boost, you must have at least one credit account, whether it's a credit card or a personal loan, which would make this a bad option for anyone considered to be credit invisible. 

2. Signing up for a secured credit card

Secured credit cards are available to most consumers regardless of whether or not they have a bad credit score or are credit invisible. These will typically require a security deposit that's equivalent to the credit line on the card, usually between $200 and $2,500, which acts as collateral in case cardholders are unable to make their payments. Kikoff offers a secured credit card that doesn't require a credit check, but there are other options worth considering as well.

The Discover it® Secured Credit Card is a good option for anyone interested in building up their credit score, with no annual fee and a minimum security deposit requirement of $200. After seven months, automatic reviews begin to evaluate your account to determine whether or not you can be moved to an unsecured card and if your security deposit can be returned to you. Plus, you'll earn cash back on eligible purchases with this card.

If you don't want to put down a $200 security deposit, a better choice might be the Capital One Platinum Secured Credit Card; It offers cardholders the option of paying minimum security deposits starting at $49, $99 or $200 based on their creditworthiness.

Regardless of how much your security deposit is, all cardholders are eligible for a credit limit of at least $200. If $200 is considered an insufficient amount of credit, you can raise your initial credit line by depositing more than the minimum amount (up to a maximum limit of $1,000).

3. Becoming an authorized user on someone else's account

Becoming an authorized user on a friend or family member's credit card account can be a free and easy way to piggyback off someone else's positive payment history. Authorized users benefit most when the primary cardholder makes their payments on time and in full while maintaining a low utilization ratio.

While authorized users are not responsible for paying off the primary cardholder's balance, the trade-off is they don't have the same abilities as the primary cardholder.

4. Taking out a credit builder loan

With credit builder loans, instead of getting your money upfront, it's held in a savings or CD account. You make monthly payments towards your loan and the lender reports those payments to credit agencies. Once the full balance of the loan is paid, you receive the funds, minus any fees or interest. While credit builder loans don't require a good credit score, they may need some level of approval. The Self Credit Builder Account offers payment plans ranging from $25 to $150 a month, all for terms of 24 months.

5. Rent reporting through Bilt

Bilt Rewards is a loyalty program that allows users to earn points by paying their rent. If you live in a Bilt Rewards Alliance property, you can opt-in to have your rent reported to the three major credit bureaus. If you don't you can still pay your rent with the *Bilt Mastercard® to earn rewards and have your credit card activity reported to the bureaus. (See rates and fees).

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For rates and fees of the Discover it® Secured Credit Card, click here.

*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost™.