Getting started on the road to building credit can be difficult.

Money expert Clark Howard has historically talked about secured credit cards as a way to build credit when you have none.

But secured cards can take up to 18 months to do what they’re intended to do. Plus, there’s an application fee that can range from zero to $60 or more for a secured card.

Now, a new service called Self Lender promises to help shorten that timeline and lower the cost of you building credit.

Self Lender reinvents credit builder accounts for a new age

Imagine having the ability to save money each month into an account that earns interest and builds your credit history with the three main credit bureaus at the same time.

That's exactly what Self Lender offers. Think of what Self Lender does like this: It's a loan you make to yourself — hence the name.

You deposit a set amount of money each month — ranging anywhere from $25 to $150 — into a 12-month certificate of deposit (CD) that’s FDIC insured.

The catch is that you can’t touch the money until it matures.

As you make those payments to yourself, each month’s payment is reported to Equifax, Experian and TransUnion to help build your credit.

Then, whe the CD matures in 12 months, the money unlocks and is yours to keep — with the interest you earned included! As of this writing the annual percentage yield for the CD is 0.10%.

The annual percentage rate (APR) currently being charged by Self Lender’s partner bank ranges from 12.03% to 15.65% (subject to change) depending on the amount of your deposits, so that will eat up some of your money, but it’s up to you to decide as an individual what your tolerance is for paying that as you build your credit.

What’s the historical precedent for Self Lender?

What Self Lender is doing isn’t actually a new idea. It’s really just an extension of “credit builder accounts” that were historically only offered by some community banks and credit unions in certain areas of the country.

Those geographic limitations prevented everyone from taking advantage of credit builder accounts. If you didn’t live in an area where these accounts were offered, you were out of luck.

So what Self Lender is doing that’s new is they’re taking the idea of credit builder accounts and democratizing them for everyone through the power of the Internet.

Now it doesn’t matter where you live; all it takes is an Internet connection and you can start building your credit month by month!

Does Self Lender do business in my state?

Currently, Self Lender is available in 47 states across the country. The only places where it doesn’t do business at this time are New York, Vermont and Wisconsin.