Bits credit builder review

Buy your way to better credit with a monthly Bits subscription that's reported back to Equifax.

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Until recently, you couldn’t make purchases using your virtual Bits credit card. Now you can… but only in the Bits store. What you can do is build your credit score *ahem* bit-by-bit, in return for a monthly fee.

What is Bits?

Put simply, Bits is one of a handful of new services (including LOQBOX and Pave) that effectively let you buy your way to better credit.

In its own words, Bits describes its credit building service as a “digital store credit card” designed to help you build or improve your credit rating without the risk of accruing credit card debt. Unlike regular credit-builder credit cards, the Bits card is digital-only and can’t be used to make purchases (outside of Bits’ own web store – with it’s small selection of partner brands) or to get cash advances.

It’s easier to think of it as less of a credit card and more of a credit-building tool. If no card issuers will approve you for a card today or if you can get approved for a card but only with a high interest rate, the idea is that by using Bits, you’ll boost your chances of getting approved in the future.

Not sure if you need to boost your credit score? Check yours for free.

How does Bits work?

Each month, Bits charges a subscription fee to your card, and then automatically uses your card to pay off the fee. While this sounds counter-productive, the key is that this fixed amount is treated like a regular monthly credit card payment, which Bits then reports to Experian and Transunion.

By paying off this “debt” in full each month, you’ll be demonstrating your creditworthiness to potential lenders, which is then recorded on your credit history.

Your credit score should then start to improve after a few months, provided you aren’t applying for other credit and are paying off any other bills you have.

You can track your card status and payment schedule using the Bits app, and then track changes in your Experian credit score for free.

Bits is a digital card, so you won’t receive a physical card and will instead manage your account via the Bits app. You also won’t be able to use Bits to borrow money, get a cash advance or pay for purchases. It’s only intended to be a tool for those looking for a straightforward way to improve their credit score.

Does Bits report to Experian?

Yes, Bits reports your monthly subscription payment to Experian. However, Bits’ “Rent reporting” service does not report to Experian.

Does Bits report to Equifax?

If you opt into Bits’ “Rent reporting” service, which documents timely rent payments in your credit file, this is reported to Equifax. However, your monthly Bits subscription is not reported to Equifax.

Does Bits report to TransUnion?

Yes, Bits have recently added TransUnion to their repertoire. Just like with Experian, Bits’s “Rent reporting” service does not report to TransUnion.

Bits app screenshot showing choice of plans

How much does Bits cost?

You choose either a £4, £12, £20 or £40 monthly subscription fee. These payments are then handled as credit card repayments, and provided you don’t do anything elsewhere to damage your credit score at the same time, should start to boost your credit score. The larger the monthly fee, the greater the likely benefit to your credit score.

The fees are non-refundable and aren’t returned to you when you cancel your account.

no interest or other fees.The Bits card doesn’t work as a regular credit card, so you won’t be charged interest and won’t pay any ongoing or annual fees.

How long will it take for Bits to improve my credit score?

You’ll start to see Bits showing up in your credit file within 6-8 weeks from signing-up. Once you’ve made 2-3 monthly payments on time and in full, you should see your score start to increase. However, other factors influence your credit score – so if you make all your Bits payments on time but default on a separate loan, for example, then your credit score may decrease.

Is the Bits card right for me?

If you struggle to get approved for credit products (or if you can get approved but only get offered terrible rates), then signing up to Bits and letting it run for a while could boost your chances of approval and help you access lower rates.

If you’re looking to improve your credit score, but also want the benefits of a normal credit card, you’ll want to compare credit-builder cards.

However, Bits isn’t the only service around that effectively offers credit building without the credit, and there are also other steps you can take to help your credit score.

Pros and cons of Bits

What’s good about Bits?

  • A straightforward way to build your credit score.
  • Easy to apply and manage in the app.
  • Although you can’t use your card to pay in physical stores, you could opt to purchase a gift card through the Bits web store.
  • Reduced risk of getting into serious debt.
  • You could get your rent payments reported to Equifax to boost your score further.

What’s not so good about Bits?

  • A monthly fee of up to £40 that’s non-refundable.
  • Can’t be widely used as, erm… a credit card.
  • Any missed payments will hurt your credit score.
  • Reports your payments to just one credit reference agency.
  • The Bits store currently features quite a limited range of brands to shop with… but then that’s not really what this product is about.

Bits app screenshot of welcome screen

What can I do in the Bits app?

The Bits app is the easiest way to manage your Bits card. As you don’t get the features of a regular credit card, the Bits app is relatively limited, but you can use it to track and manage your monthly payments (changing the date if you need to), update your billing details and address, and cancel your card.

You’ll also be able to access the Bits store via the app, where you’ll have a store credit limit that’s proportional to (12x) your monthly subscription amount. So if you’re on the £4 per month Basic plan, you might opt to borrow and spend up to £48 through the store (although you do have to pay half of each purchase up front).

Bits has partnered with a selection of retailers – some well known (including ASOS, Boohoo, Nike and JustEat), and some less so.

Is Bits credit legit?

Bits is registered with the Information Commissioner’s Office (registration number ZA507202). It uses Stripe to take monthly payments, and Plaid for read-only access to your bank account if you opt for rent reporting.

You can’t use the Bits credit card as a traditional credit card outside of the Bits web store, which means there’s much less risk of both fraud or accruing credit card debt. It’s also virtual, so it effectively only exists on your phone.

Bits is the brainchild of Faisal Khalid who founded it in 2019. He launched the tool after moving to the UK from the US and being frustrated by a thin UK credit file holding him back.

How do I apply for Bits?

You can register in the Bits app, which you can download in the App Store or Google Play. It takes about five minutes.

Unlike most credit cards, the Bits card has very simple eligibility criteria, and you won’t need to pass a hard credit check or meet a lender’s financial requirements to be approved.

To apply for a Bits credit card, you’ll just need to provide the following information:

  • Name and date of birth
  • Email address
  • Mobile number
  • Address
  • Bank card details

Bits says you shouldn’t apply if you’ve had an IVA, CCJ or been bankrupt in the last six months. It also says you shouldn’t apply if you’re currently struggling with debt.

How do I cancel Bits?

If you change your mind at any point, email Alternatively you can Whatsapp Bits from the app.

Bits app screenshot showing a credit reference agency FAQ

Is Bits any good?

The idea of paying as much as £40 per month just to improve your Experian and TransUnion credit score is likely to put most people off. In the field of pay-monthly credit score boosters, Bits is going head-to-head with the likes of LOQBOX, which eventually returns your subscription fees to you, so this could be a fatal flaw in its business model.

Bits’ 2021 addition of a new feature that lets your rent payments contribute towards your credit score (an idea pioneered by fintechs such as CreditLadder) is a smart move. Alongside the monthly subscription payment, this feature could have meant that Bits would benefit your credit score more than its rivals.

Alternatives to Bits

Firstly, you should get to know your credit score and read our tips on improving it (some are very quick and easy).

Other credit-boosting tools

Like Bits, LOQBOX offers an alternative to those looking to build their credit score. LOQBOX is a hybrid savings and credit account that lets you make a monthly deposit from £20 to £200, which is then treated as a credit repayment for the purposes of your credit rating. The big difference with LOQBOX is that, after an agreed term, you get your monthly fees returned to you. LOQBOX appears on your credit file as a small loan, while Bits appears as a store card.

Meanwhile, CreditLadder is a free service that allows you to have your rent payments recorded in your Experian or Equifax credit report (similar to the Bits “Rent reporting” service).

Name Product Rating Reports to Savings requirement Credit limit Fee How it works
Pave Plus
Finder rating
Experian, Equifax, TransUnion
Not specified
£9 per month
Build your credit score with all major Credit Reference Agencies by paying your membership fee on time. Subject to eligibility, Pave may open a credit line that you can use to top up your bank account periodically.
Pave Lite
Finder rating
£5 per month
Build your Experian credit score by paying your membership fee on time (reported to Experian as loan repayments).
Loqbox free
Finder rating
Experian, Equifax, TransUnion
£20 - £200 per month
Decide how much you can save over 12 months and LOQBOX will handle each deposit as a payment on a 0% APR loan – helping build your credit score. Receive all your savings back into a new bank account for free.
Loxbox flexi
Finder rating
Experian, Equifax, TransUnion
£20 - £200 per month
£30 (one-off)
Decide how much you can save over 12 months and LOQBOX will handle each deposit as a payment on a 0% APR loan – helping build your credit score. Receive all your savings back into an existing account for £30.
Pave Spotlight
Finder rating
£3 (one-off)
Identify the best fixes for your score and check if Pave Plus could help you build credit.

Credit builder credit cards

Provided you could get approved, would use the card responsibly (staying within you limit and making payments on time) and would pay your balance off in full each month, a credit card might be a better bet.

Credit builder credit cards are suitable for those with bad credit but still looking to get a credit card. By successfully managing your credit account, you’ll demonstrate your responsibility as a borrower and eventually be eligible for credit cards with better rates, terms and benefits.

Table: sorted by representative APR, promoted deals first
Name Product Annual/monthly fees Initial credit limits Minimum income Representative APR Incentive Link
Barclaycard Forward Credit Card
Min. limit £50, max. limit £1,200.
Rate discounts: 3% interest rate reduction if you make all your repayments on time for the first year, and a further drop of up to 2% more if you continue to do so in the second year.
Representative example: When you spend £1,200 at a purchase rate of 33.9% (variable) p.a., your representative rate is 33.9% APR (variable).
Check eligibility
Tymit Credit Card
Min. limit £500, max. limit £15,000.
Not specified
Representative Example: 22.9% (variable) based on a borrowing of £1200 over 12 months with no annual fee.
The Credit Thing card
Min. limit £200, max. limit £1,500.
Not specified
Representative example: When you spend £1,200 at a purchase rate of 27.9% (variable) p.a., your representative rate is 27.9% APR (variable).
TSB Classic Credit Card Mastercard
Min. limit £500, max. limit not specified.
Not specified
Representative example: When you spend £1,200 at a purchase rate of 28.95% (variable) p.a., your representative rate is 28.9% APR (variable).
Vanquis Bank Chrome Credit Card
Min. limit £500, max. limit £1,500.
Not specified
Representative example: When you spend £250 at a purchase rate of 29.5% (variable) p.a., your representative rate is 29.5% APR (variable).

Approval for any credit card will depend on your status. The representative APRs shown represent the interest rate offered to most successful applicants. Depending on your personal circumstances the APR you're offered may be higher, or you may not be offered credit at all. Fees and rates are subject to change without notice. It's always wise to check the terms of any deal before you borrow.

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