Loqbox review

Loqbox is a financial tool designed to help you build or rebuild a positive credit history with all 3 UK credit reference agencies while you save. It offers 2 membership options: Full and Lite. Full membership is £2.99 per week, but you
can try out its powerful credit-building features with a one-week free trial.

When you choose to activate a Loqbox, on the Loqbox Save feature you’ll set up a direct debit to save a set amount each month. These direct debits are cleverly treated as finance repayments, which are reported to credit reference agencies – demonstrating your financial responsibility to lenders and improving your chances of securing favourable credit deals. You can “unlock” your Loqbox anytime, withdraw all your savings, and end your membership.

Loqbox offers a variety of tools that aim to help boost your credit score and build (or rebuild) a positive credit history. Loqbox also provides guidance and financial education through its “Learn” tool.

Once you have chosen a Loqbox membership that works for you, you can explore the tools available for your membership.

Loqbox Save – A saving strategy designed to improve credit score

Saving is one of Loqbox’s original credit-building features, and it does exactly what it says on the
tin: it helps you to build credit while you save.

You’ll set an annual savings goal and then Loqbox collects 12 monthly amounts from your debit card. These are treated as finance repayments, which are reported to credit reference agencies. The
payments demonstrate your financial responsibility to lenders and should improve your chance
of accessing credit deals.

You can cancel this feature anytime and withdraw the savings you have made.

In a nutshell, Loqbox will handle each ‘saving’ payment as a payment on a 0% APR loan, which
helps to build your credit score.

Here’s how it works:

1. You choose to make regular monthly savings of anywhere between £20 and £200.
2. Your monthly savings become repayments on a finance agreement. You use interest-
   free credit to pay for your Loqbox savings over 12 months. Each repayment (what you save each month) gets added to your credit history.
3. You can then withdraw what you’ve saved at any time or let the 12 months run its course. If you change your mind or think you might struggle to make a payment, you can withdraw your savings at any time. You’ll get back everything you’ve paid in. This means you won’t have to miss any payments, which would harm your credit rating.
4. When you cancel your Loqbox and get all your money back (either after the 12 months are up, or sooner, if you decide to withdraw your money), you’ll be asked to open a bank account or ISA with one of Loqbox’s partner banks for it to pay your money into. This is how Loqbox gets paid – earning a referral fee from its partners for bringing in new customers, which is in turn how it makes the service free for you. If you don’t want to do this, you can pay your savings into an existing account for a £30 charge. With full membership, you can transfer your savings into any account free of additional charge.

Loqbox Rent – Report your rental payments

This is Loqbox’s credit building product that reports your regular rent payments to the credit
reference agency Experian, granted that you pay your rent on time each month. Here’s how it
works:

1. Connect your bank account to your Loqbox account, through Open Banking.
2. Loqbox identifies your rent payments.
3. After six consecutive rent payments, they are reported to Experian, helping to build your
   credit history and therefore your creditworthiness.

Loqbox Grow

Loqbox Grow is an interest-free credit account available to those with a Full Loqbox Membership. Loqbox reports your monthly membership payments to the credit reference agencies to help build your credit history.

Used responsibly, you could see an improvement to your credit score of “125 points in the first six months on average”.

Loqbox Coach and Loqbox Learn

Available to both memberships, Loqbox Coach and Loqbox Learn offer free personalised financial guidance and educational resources to improve your financial literacy and make smarter financial choices.

Loqbox offers 2 membership options to help its customers achieve their financial goals, here are some key differences:

_{* Improvements to your credit score are not guaranteed. Missing payments to Loqbox or other
credit accounts may harm your score.}

You can sign up online in under five minutes and have your Loqbox account open in another five minutes, and you won’t be subjected to a credit check.

Loqbox is authorised and regulated by the Financial Conduct Authority (FCA). Any money you put into your Loqbox is protected (albeit in a roundabout way) by the Financial Services Compensation Scheme (FSCS) and is held in a dedicated client account, away from Loqbox’s own funds.

Following a cyber-attack on 20 February 2020, Loqbox has implemented enhanced protocols to protect client data. While all Loqbox funds remained safe and the company functioned as normal during this cyber attack, some of its customers’ personal information was likely to have been compromised.

You may also be the target of phishing scams, but Loqbox will never contact you to ask for your full bank or card details. If you receive a call, text or email from someone claiming to be from Loqbox and asking for your financial information, do not give them your details.

Loqbox was founded in 2017 by Tom Eyre and Gregor Mowat with the mission to help people who have found themselves excluded from accessing fairly priced credit either because they are young with little or no credit history, or because they have made past credit mistakes.

It’s worth noting that Loqbox isn’t actually a lender – it acts as an “introducer”. Credit is provided by DDC Financial Solutions. If you take out a Loqbox Save, you are effectively accepting a finance agreement from DDC financial solutions. Your monthly savings are the repayments on that agreement, which will build up your credit history over time. The finance that DDC provides has no charges or interest, essentially making it a cost-free way to improve your credit rating. So what’s the catch? At the end of the term, you must be prepared to open an account ot ISA with one of Loqbox’s partner banks, or pay a fee to transfer to one of your existing accounts.

Loqbox is authorised and regulated by the Financial Conduct Authority.

The boost to your credit score and the fact that it’s free (if you go for Loqbox Lite and open an account with a Loqbox partner) make it easy to look past Loqbox’s flaws. For people looking to access a loan right now, Loqbox isn’t the answer. But if you’re serious about building a positive credit history and accessing lower rates in the not-too-distant future, we think Loqbox is a smart choice. Plus, if you’re willing to pay a fee, Loqbox offers a paid membership with access to more credit-building tools.

Other companies have started to copy Loqbox (check out Pave, Bits and Tymit Booster) – which is always a good sign. But Loqbox is still out in front due to its pricing and the fact that it reports to all 3 main UK credit reference agencies.