Kikoff review: This credit building product helps people with no credit score and costs $5 a month

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. After graduating, she was able to rent her first apartment and purchase her first car.

For millions of Americans, not having a credit history can impact the ability to secure a mortgage, obtain a new credit card or receive lower interest rates on loans. Those who do not have a credit score because they have insufficient credit histories are considered to be credit invisible. A recent report by the Consumer Financial Protection Bureau revealed that 26 million people — nearly 1 in 10 Americans — fall into this category.

The report highlighted a disproportionate impact on low-income as well as Black and Hispanic consumers. According to the Consumer Financial Protection Bureau, low-income neighborhoods tended to have higher rates of credit invisible individuals compared to high-income neighborhoods, while Black and Hispanic consumers were more likely to be credit invisible than their white and Asian counterparts.

Chen founded Kikoff in 2019 with the intention of helping 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," says Chen. "I realized that there was a pretty big gap in servicing this population because the existing solutions in the industry were very expensive."

Below, Select takes a closer look at how Kikoff works as well as some other options that exist for people interested in building up their credit scores.

Kikoff is a credit-building product that offers all 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.

Chen recommends thinking about Kikoff as if it's a payment option that can only be used in the Kikoff store. By using the Kikoff line of credit and purchasing an item in the store, users will have a Kikoff credit account that gets reported to some of the major credit bureaus. This can in turn can help people boost their credit scores.

While Chen won't disclose specifics on the particular products offered in the store, she notes that there are financial literacy and entrepreneurship e-books and courses. The items on average cost $20, and users are required to make a minimum monthly payment of $5.

Kikoff then reports your payment history to two of the three major credit bureaus, Experian and Equifax.

The intention behind Kikoff is to help users improve their FICO credit scores. Five factors comprise 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 will receive email and text reminders letting them know it is overdue. Users then have 30 days beyond the due date to make a payment before the missing one is reported to the credit bureaus. 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%. For example, if you purchased one item for $10 on Kikoff, you'd then only have a credit utilization ratio of 2%, which would also help improve your credit score.

Lastly, Kickoff 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.

Since Kikoff does not perform a credit check to determine approval, you'll just need to be a U.S. citizen with a Social Security number. In order to verify your identity, Kikoff will perform a series of fraud checks before you're approved. The service is available in 48 states and is not currently available in Indiana and Delaware.

Kikoff is available in the Apple App Store and the Google Play Store. The app has generally favorable reviews despite some complaints from people who were not aware what the service is. Kikoff has a 4.7/5 rating based on 21,304 reviews in the Google Play Store. It has a 4.9/5 rating based on 28,827 reviews in the Apple Store.

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 out there that might be cheaper or provide more utility, or could even work in tandem with Kikoff. Here's a look at some of the alternatives to using a service like Kikoff. 

Kikoff is geared toward helping credit invisible consumers and those with poor credit scores to improve their credit scores.

Using Experian Boost™

Experian Boost is a free service that uses consumers' on-time utility, telecom and streaming subscription payments to calculate their FICO® Scores. By reporting their Netflix or water bill payments, consumers can see their credit scores improve based on monthly payments that are not traditionally used to calculate a credit score. Note that in order 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. 

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.

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 your 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, which offers cardholders the option of paying minimum security deposits of $49, $99 or $200 based on your creditworthiness.

Regardless of how much your security deposit is, all cardholders are eligible for a credit limit of $200. If $200 is considered to be 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 $1000).

Becoming an authorized user on someone else's account

Lastly, 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 and won't be able to increase the credit limit or earn rewards — primary cardholders receive an extra card for the authorized user but are not required to actually give them the additional card. If the primary cardholder does choose to give it to the authorized user, they'll be on the hook for any payments. If you ask a loved one or friend to make you an authorized user on their credit card, be sure to talk to them about payment plans and consider not receiving the actual card from them at all to avoid any potential spending issues.

Update: This article has been updated to reflect that Kikoff is now available in Nevada.

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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.