Loqbox Creditbuilder: how the saving-to-build plan works

Loqbox Creditbuilder is a 12-month plan that reports a monthly payment to the credit reference agencies so that a payment history builds up on your credit file. It is not a loan. Loqbox states plainly that you do not receive any money or refunds from it at any point, and that the total you pay over the 12 months is £71.40¹.

That figure is the whole cost of the plan, and it is the first thing to understand about it. You are not saving into a pot you get back, and you are not borrowing. You are paying for a record of regular payments to appear on your credit file, which is the thing lenders look at when they decide whether to accept you.

The plan suits people with little or no credit history: someone new to the UK, someone who has never borrowed, or someone whose file is thin rather than damaged. Loqbox says Creditbuilder can help steer you in the right direction if you are new to the UK, do not have much credit history, or want to improve your credit score². What it cannot do is guarantee a better score, and missing a payment can make things worse.

What Loqbox offers: building a credit history while saving towards a goal

The idea behind Loqbox is that a lender looking at your file wants to see a pattern: money going out on time, month after month, with nothing missed. If you have never had a credit card, loan or catalogue, there is nothing for a lender to look at, and that absence is itself a problem. Credit builder products exist for exactly this group. StepChange describes credit-builder cards as being aimed at people with a poor credit record or little credit history, and marketed as a way to better your credit score and help you get your finances on track⁴.

Loqbox Creditbuilder takes a different route to the same end. Rather than lending you money to spend, it takes a fixed monthly payment from you and reports that payment to the credit reference agencies. Over the 12 months, the record shows a run of payments made in full and on time. Loqbox says it will report your monthly payments to credit reference agencies to build your credit score¹.

The "saving towards a goal" framing needs care. The plan is a commitment to pay, not a savings account you draw on. Loqbox states that no money or refunds are received at any point¹. Anyone expecting a lump sum at the end of the 12 months has misunderstood the product, and that misunderstanding is worth clearing up before signing up rather than after.

It is also worth knowing what else is out there for the same purpose. Credit-builder credit cards are one alternative, and StepChange notes that such cards can be cheaper than high cost credit like payday loans⁴. A basic bank account is another starting point: there are accounts that accept those with a poor credit history⁵. The credit builder loans and saving plans page sets the options side by side.

How the Loqbox membership charges work

The charge is a monthly account fee, and the plan is built around paying it on time. Loqbox sets out the commitment as 12 monthly payments of £5.95, and states that you must be able to afford to make all 12 on time¹. The total over the year is £71.40¹.

There is no interest and no joining fee. Loqbox states there is no joining fee, no interest and no added or hidden costs³. That matters when comparing the plan with borrowing: a credit-builder card charges interest on anything you do not clear, whereas this is a flat fee with nothing borrowed behind it.

The fee structure has a sting in it if you change your mind late. You can cancel within the first 14 days³. After that cooling-off period, closing Creditbuilder means paying any outstanding account fees for the 12-month period you have committed to³. In other words, cancelling in month three does not stop the remaining nine months of fees being owed. That is the single most important term on the page for anyone weighing up whether to start.

The plan is not available on every account. Loqbox states that Creditbuilder is not available on the personal account with no monthly fee or on the free business bank account, Business Go³. If you are on one of those plans, the add-on is not open to you as things stand.

Who can join: no hard credit check needed

The point of a credit-building product is that it is open to people whose files would fail a normal lending check. Prepaid cards, which serve a similar audience, are described as needing no credit check⁶. Loqbox Creditbuilder is aimed at the same kind of customer: Loqbox says it can help if you are new to the UK, do not have much credit history, or want to improve your credit score².

That said, "no credit check" is not the same as "no checks at all". You still have to be able to afford the monthly payment, and Loqbox states that you must be able to afford to make all 12 monthly payments of £5.95 on time¹. A plan you cannot sustain is worse than no plan, because the missed payments are reported.

If you are weighing up whether your file is thin or damaged, the distinction matters. A thin file has little on it; a damaged file has adverse entries such as missed payments or defaults. The building a credit history from scratch page covers the first case, and rebuilding your credit after bankruptcy, an IVA or a DRO covers the second. Loqbox is aimed at the first.

Reporting to Experian, Equifax and TransUnion

There are three main credit reference agencies in the UK: Experian, TransUnion and Equifax⁷. Every lender that reports information about you sends it to one or more of them, and a lender considering your application will typically look at one or more of your files. Which one it uses is the lender's choice, which is why the same person can look different to different lenders.

Loqbox says it reports your monthly payments to credit reference agencies to build your credit score¹. The value of the plan depends entirely on that reporting: the payment itself does nothing for your file unless it is passed on and recorded. Because the three agencies hold separate files, the effect of any single account depends on which agencies it is reported to.

It is worth checking your own files while the plan runs, so you can see the payments appearing. You can check your credit report for free, and the how to check your credit report for free page explains how. If something is missing or wrong, the how to correct wrong information on your credit report page sets out what to do. The UK credit reference agencies page explains who holds what.

Credit score improvements are not guaranteed

No credit-building product can promise a better score, and Loqbox does not. Loqbox states that Creditbuilder lasts 12 months and that it can take at least three months to see any change in your credit score¹. Three months is the earliest point at which anything might show, not a deadline by which it will.

The reason no one can promise a result is that a score is a lender's or an agency's summary of your whole file, not a reward for one account. Which? reports that it takes six to 12 months of paying on time for someone who has never officially borrowed before to improve their credit score⁶. That is a general finding about credit building, not a statement about Loqbox, but it gives a realistic sense of the timescale.

There is also a limit to what a score change means. Which? notes, in the context of Experian's score, that a change does not affect your ability to get credit⁷. The score is a guide for you; the lender makes its own decision from the underlying file. The how lenders decide whether to accept you page explains what they weigh up.

Missed payments can harm your credit score

This is the risk that sits underneath the whole plan. Loqbox states that missing a payment can harm your credit score¹, and explains why: it is obliged to report negative as well as positive information to the credit reference agencies, so paying late or missing a payment could harm your credit rating².

The wider evidence on missed payments is consistent. The Welsh Government's cost-of-living guidance states that missed payments could affect your credit rating, making it more difficult to get credit in the future⁸. StepChange notes that missed payments go on your credit file and can make it harder to get credit in future and to remortgage⁹. Which? reports that one late payment on a credit card or loan can dent your score by as much as 130 points, according to Experian⁶.

The same principle applies across household bills. Which? warns that if you do not pay a bill on time, this could affect your credit rating and will appear on your credit file¹⁰. Buy now pay later is no exception: StepChange states that missed payments on a BNPL agreement will show on your credit score and can make it harder to get credit in the future¹¹.

For anyone on a tight budget, the practical question is what happens if the money runs out mid-plan. The missed and late payments on your credit file page explains how entries are recorded and how long they last. If you are already struggling with debts, free help is available from StepChange and National Debtline, and the debt section sets out the options.

Is Loqbox the same as the Creditbuilder add-on from Zempler Bank?

No, and the shared name causes real confusion. Zempler Bank's Creditbuilder is an add-on to its Activeplus bank account: it is available as an add-on feature in-app or through Online Banking once you have activated your card and paid any initial fees¹². Zempler describes it as an Activeplus bank account add-on¹³, and says it is free to add to a Business Extra or Activeplus Account with no extra charges or interest¹⁴.

Loqbox Creditbuilder is a separate product from a separate company, with its own 12-month term and its own monthly fee. The two are not connected, and signing up to one does not sign you up to the other. If you have seen the name and are not sure which product you are looking at, check which company's app or website you are on before entering any payment details.

The Zempler version also has its own terms worth knowing if that is the one you are considering. Zempler states that after the 12-month Creditbuilder agreement has finished, you will continue to have the Activeplus account, which carries its own monthly fee¹⁴. It also states that paying late or missing a payment could harm your credit rating, as it is obliged to report negative as well as positive information¹². The current fee for that account is set out in Zempler's own fees and charges information¹⁴.

Complaints and when the Financial Ombudsman can help

Start with Loqbox itself. The general rule for any lender complaint is to raise it formally with the lender first¹⁵, and the Financial Ombudsman Service says the same: talk to your lender or broker, because they need to have the chance to put things right¹⁶. If you are not satisfied with the response, you can take the complaint further.

Firms have eight weeks to respond to a complaint¹⁷. If that period passes without a resolution, or you are unhappy with the final response, the complaint can go to the Financial Ombudsman Service. The ombudsman can look at complaints about how a lender or debt collection agency has behaved when dealing with your account, for events from April 2007 onwards, once the lender's own complaints procedure has been used¹⁸.

Not every complaint is within the ombudsman's remit, so it is worth checking before you spend time on it. The ombudsman's online complaint checker asks a few questions and tells you whether it thinks it can help and what to do next¹⁹. The ombudsman can also help with complaints about claims management companies²⁰, and with complaints about something a credit repair company has done since October 2008²¹.

If you are unhappy with how a bank has handled a complaint about fraud, you can refer it to the Financial Ombudsman Service²². The ombudsman also handles complaints about account closures, disputed transactions, IT failures and problems with switching services²³. Where a complaint is about a credit broker, the broker must forward it to the lender and tell you it has done so²⁴.

Free, impartial help is available if money is tight or a complaint is going badly. StepChange and National Debtline both advise on debt and complaints at no cost, and the debt section explains the routes. The Loqbox brand page covers the company itself.