Credit Building > Loqbox credit builder review: is it the right one for you?

Loqbox credit builder review: is it the right one for you?

Wollit Team4 minute read · Updated 1st July 2024

Interested in the Loqbox credit builder but not sure if it's right for you?

In this review we’ll look at how it works, if it can help you improve your credit score, and see what other customers have to say.

What is Loqbox?

Loqbox is a UK based app that aims to help people improve their credit score while saving their money in something like a digital piggy bank.

Hence the name – "lockbox."

How does Loqbox work?

Loqbox combines a loan with a savings account in a way they claim can help build your credit score.

Here's how:

First, choose how much you want to save each month. You can choose between £20 and £200. Loqbox will then set up a monthly Direct Debit for this amount.
Loqbox then gives you a 0% APR loan for the amount you want to save over a whole year. This isn't a loan you can actually use; it's just on paper to help you build a credit history.
You'll save your chosen amount each month for 12 months. Loqbox uses your direct debit payments to pay off the loan you locked away. This means your subscription bills can be treated as "repayments". Each "repayment" gets added to your credit history.
You can "unlock" your Loqbox anytime to get all your money back and walk away.
You'll have to move those savings to a new account or ISA when you leave. The catch is that you have to use a Loqbox partner bank.
If you don't want to open another account with their partner bank, you'll have to pay Loqbox another £30.

Each month, Loqbox reports to the credit agencies (Equifax, Experian, and TransUnion) that you've made your repayments, which should increase your credit score.

After 12 months, this so-called loan is paid off, and you should have access to the £240-£2400 you saved, plus maybe a few points extra to your credit score.

How much does Loqbox cost?

Loqbox actually has multiple services:

Loqbox Save: save and boost your credit score.
Loqbox Grow: an interest-free, credit-boosting account. It is a loan that Loqbox gives to boost your credit score.
Loqbox Rent: connects your bank account with Loqbox and reports your rent payments to the credit reference agencies.
Loqbox Coach: a set of basic personal finance tips delivered via email.

To get access to all of these, you'll need to pay £10 a month plus VAT, on top of the savings plan.

You can get access to all these services without making these monthly payments, but to do that you need to pay the £30 to withdraw the Loqbox money from your account instead.

What are the Loqbox pros and cons?

Pros:

It's free (if you open an account with their partner bank).
There’s no credit check involved.
You'll build up some savings.
It gives a slight boost to your credit score.
You can cancel your subscription anytime and get your savings back.
Your money is protected by the Financial Services Compensation Scheme (FSCS), which backs savings up to £85,000. So if Loqbox goes bankrupt, you'll get your money back.
Loqbox reports your payments to all three big UK CRAs: Experian, Equifax, and TransUnion. Some other credit-building services report only to one of them.

Cons:

You're not earning interest on the money you save.
If you somehow miss a payment, you'll actually harm your credit score.
You can't change your monthly payment date or any other details.
At the end of the 12 months, you'll end up with a new account that you might not have wanted. Otherwise, you have to pay a £30 fee.
Opening a new account, which you are asked to do at the end, can also have a negative impact on your credit score.

Is Loqbox safe?

Good question.

First, Loqbox is authorised and regulated by the Financial Conduct Authority (FCA).

Second, the money is also kept in a special, designated client account with Barclays. Even if both Barclays and Loqbox go bust, you are covered – your money is protected by the Financial Services Compensation Scheme (FSCS).

However, Loqbox did experience a data breach on 20 February 2020. While all Loqbox funds remained safe, some of its customers' personal information was probably leaked. Loqbox claims to have since taken steps to improve its computer security.

Also, your credit score is only safe if you pay those direct debits on time. Any missed payments will end up reported to the credit reference agencies exactly as a missed payment on a loan – and this could really damage your credit score.

Are the Loqbox reviews good?

It depends where you’re looking.

On Trustpilot, a well-known review site, Loqbox has almost 18,000 reviews with a rating of 4.5 out of 5.

Digging in, you can see that almost 10% of reviews only give Loqbox a 1 star for things like:

"terrible customer service" and "no channel of communication": several customers complained that their emails to Loqbox wouldn't get delivered, and contact details were hard to find.
"hidden fees": Many customers said that it's easy to join, "but it's like jumping through hoops backwards to get your money back." Now, Loqbox is transparent in advertising its fees. Still, for many people, it's a bit confusing having to pay £30 to access their own savings.
Other customers complained that it was a bit too easy to sign up for multiple Loqbox services. Loqbox has simplified the process since then (now you just pay the £10 plus VAT), but it's still a bit confusing.

That's Trustpilot.

On Finder.com, another review site, it has a rating of 2.2 out of 5.

The main complaint here is that the payments sometimes can take 3 months to appear in your credit report. Others were, again, confused by Loqbox's complex fee structure.

So, is Loqbox worth it?

The potential boost to your credit score and the fact that it's free (if you open an account with a Loqbox partner) are decent features.

And to their credit, Loqbox also recently simplified the fees. Now, if you pay £10+VAT, you can get access to all their services.

Overall, though, Loqbox is still a confusing service.

Other credit-building tools, like Wollit, improve your credit score in a much simpler and more transparent way: you pay a subscription fee, which is reported to the credit agencies, and we also report your rent payments.

Wollit even tracks your spending on Buy Now Pay Later plans so you don't miss any repayments. No fuss or need to open new bank accounts or anything like that.