Over 130 million Americans have a low credit score or none at all. In the U.S., having a great credit score brings about all sorts of benefits that help you get ahead financially. If you suffer from a poor credit score, this can really set you back in your financial goals. It affects your ability to buy a house to secure your future, or a car to simply get to work, for example.
Today, we’ll be talking about StellarFi, a company that aims to solve this very widespread issue. How does it work? How much does it cost? Is it worth it?
Let’s cover all that and more here in this honest review of StellarFi.
- What is StellarFi?
- Who should use StellarFi?
- How does StellarFi work?
- Where is StellarFi available?
- Can StellarFi hurt your credit score?
- Can you get a loan from StellarFi?
- How much does StellarFi cost?
- What is the difference among the StellarFi membership tiers?
- Are there any hidden fees?
- Is StellarFi legit?
- Is StellarFi safe to use?
- In conclusion
What is StellarFi?
StellarFi is a company that was publicly launched in 2022 and purports to help people build their credit score. Lamine Zarrad, a formerly enlisted Marine, is the founder and CEO of the company. On paper, StellarFi’s goals are quite a great endeavor, but if its vision is executed well, we can see this company being a game-changer in terms of making great credit scores a universal reality. At this time, it’s a relatively new product hence the lack of BBB accreditation and rating.
Also check out our guide to increase your credit score.
Who should use StellarFi?
Just about anyone can use StellarFi, but those with a poor or no credit score stand to benefit the most from it. Especially if you are just starting out on your financial journey or don’t have a credit card to pay things off with, you could really benefit from this app. How does StellarFi work? Great question.
How does StellarFi work?
StellarFi works by paying bills on your behalf. While that may not sound like a big deal if you’re already paying bills, you’re actually missing out on the full benefits of paying your bills, especially all your on-time payments. Your payment history makes up a full 35% of your credit score profile. That’s nothing to sneeze at.
In order to use StellarFi, you’ll first need to meet the following requirements:
- Over 18 years of age
- U.S. resident
- Provide a social security number
Once you’ve been approved, you simply connect your bank account. Whenever a bill needs to be paid, StellarFi will do their due diligence, which includes the following:
- StellarFi will check your bank account balance to make sure you have enough funds
- They will pay off the bill for you
- They’ll debit the same amount from your bank account
- Lastly, they’ll report a successful bill payment on your behalf to all 3 major credit bureaus
That last step is key. StellarFi’s specialty lies in the fact that they can turn a basic bill payment, even one that you’ve been paying successfully and on-time for many years, into something that can help boost your credit score. It’s actually quite a shame that something like this doesn’t actually occur as the normal way of life. It really could have helped a lot of people were this widely available long ago.
Where is StellarFi available?
As an app, StellarFi is available nationwide. You can access your account via desktop, tablet, or phone.
Can StellarFi hurt your credit score?
In terms of a credit check, soft or hard, there is none with StellarFi.
However, when you sign up with StellarFi and make that first payment, StellarFi will open a new credit account to report to in all 3 major bureaus. The very act of opening a new credit account will likely hurt your credit score initially due to the fact that it lowers your average open account age. This will impact you more if you don’t have all that many other credit accounts open. Your average account age will make up 15% of your credit score profile.
Past that initial credit account opening, they actually can’t hurt your credit score directly. If anything, any dent in your credit score while you’re with StellarFi is probably more related to your end of things, unfortunately.
The key step that guarantees that StellarFi can’t hurt your credit score directly is that fact that before any bill is paid, they check your bank account to see if there are sufficient funds. If there isn’t sufficient funds, they can’t do anything about it short of notifying you that your funds are short and that you need to add money.
The issue of them being unable to pay your bill stems from the intrinsic lack of money in your bank account, but since they’ll notify you, it should actually help you become more aware of the issue and offer you a chance to fix it; that is, add any needed funds if possible.
Can you get a loan from StellarFi?
Unfortunately, StellarFi is not a lender, so they don’t offer loans. However, they do pay your bills on your behalf, and by helping your credit score, they are indirectly helping your chances of securing a loan from other actual lending companies out there. And we’re talking all sorts of loans here: mortgages, auto loans, personal loans, etc.
How much does StellarFi cost?
StellarFi makes their money via membership fees. They have three different tiers:
- Lite at $4.99 per month
- Prime at $9.99 per month
- Premium at $19.99 per month
What is the difference among the StellarFi membership tiers?
- Lite includes the benefit of reporting bills paid to the three major credit bureaus, the ability to link up to $500 in bills monthly, and bill monitoring services
- Prime includes all the above + a higher bill limit of $25,000 and credit counseling
- Premium includes all the above + the ability to pay with ACH, flexible dates for bill pay, and extra security tools
Are there any hidden fees?
StellarFi makes their money via membership fees and have no other hidden fees at this time. If any should pop up that we didn’t know about, we’ll be sure to update this post and let you know.
Is StellarFi legit?
It is a legit company despite not yet being BBB accredited at this time. Time will tell how honest and transparent its business practices are like, but so far it looks promising.
StellarFi went through the proper and usual avenues of becoming a public benefit corporation by receiving funding from entities such as Accomplice Ventures, Acrew Capital, and Trust Ventures to the tune of $7 million.
Is StellarFi safe to use?
StellarFi is definitely safe to use, they use the industry standard safety and encryption required for any financial institution. If addition, StellarFi uses randomized tokens for your personal data instead of storing them. This makes it so that even if they are hacked, your information will not be stolen.
I’m rooting for this company. Its vision is virtuous and grand. Hopefully, they’ll become a company that continues to be transparent and honest in their execution. At the very least, it’s great that they’re attempting to solve the chicken and egg problem of needing credit to build credit. And overall, they’re sure to increase financial literacy and help make great credit scores much more of a reality in the U.S. than it currently is.