How Credit Karma's New Credit Builder Tool Can Help You Boost Your Credit Score While Saving Money

Credit Karma just rolled out something that could be a game-changer for anyone struggling with a low credit score. Their latest offering, Credit Builder, is completely free and designed specifically to help the millions of people who’ve been locked out of traditional lending options.

What’s the Deal With Credit Builder?

Here’s the basics: if you’re in the U.S. with a credit score around 620 or lower, you can open a Credit Builder account with zero fees, no monthly charges, and no interest rates working against you. The platform, built in partnership with SeedFi, works on a straightforward principle—you set a savings goal (starting at $500) and commit to regular contributions on whatever schedule works for you: weekly, biweekly, or monthly.

The genius part? Your payments get reported directly to credit bureaus, which means every on-time payment helps build your credit history. Meanwhile, the money you’re putting in gets locked away in a savings account, so you’re actually stacking cash while proving to lenders you’re creditworthy.

How the Process Actually Works

The setup is surprisingly simple. When you open a Credit Builder account through the Credit Karma app, there’s no hard credit pull required—that’s a big deal if you’re worried about more damage to your score. Once you’re in, you decide your weekly, biweekly, or monthly contribution amount and stick with it.

Every payment you make gets reported to the credit bureaus by SeedFi, creating a clear pattern of responsible borrowing behavior. This payment history is one of the heaviest factors in your credit score calculation, so consistent on-time payments can meaningfully move the needle.

You can watch your progress right in the Credit Karma app—tracking your payments made, total savings accumulated, and credit score improvements over time.

The Real Value: Building Credit and Savings Simultaneously

The traditional problem with low credit scores is that they create a catch-22. You can’t prove you’re a good borrower without credit history, but you can’t build credit history without being approved for credit. Credit Builder flips the script by giving people a way to demonstrate responsibility without the gatekeeping.

Plus, there’s another huge benefit: nearly half of Americans don’t have $400 set aside for emergencies. By committing to Credit Builder, you’re literally forced to build a savings cushion while simultaneously improving your creditworthiness.

What Happens When You Hit Your Goal?

Once you reach your initial $500 savings target, you’ve got options. You can withdraw the money you’ve saved, or you can keep the ball rolling and continue building even more. And here’s the safety net: if life throws you a curveball and you can’t maintain payments anymore, you can stop the plan without penalties and keep whatever savings you managed to accumulate.

The Bigger Picture

Credit Karma Money now offers a full ecosystem—checking accounts (no hidden fees, early paycheck access), savings accounts (free, no minimums), and now Credit Builder. For the 110+ million U.S. members already on the platform, this represents another step toward fixing what’s broken in how the financial system treats people with imperfect credit.

The partnership with SeedFi brings real credibility here. The platform knows that for millions of Americans, access to affordable credit-building tools could genuinely change their financial trajectory.

If you’ve been held back by a low credit score, Credit Builder might finally be the bridge you’ve been looking for—one that pays you to use it.